Image: Skiing in Niseko
Malcolm Foster  /  AP
Skiers and snowboarders go down a slope in Niseko, Hokkaido, northern Japan, with Mount Yotei in the background. Foreign tourists and investors have flocked to scenic Niseko in recent years, giving this region a badly needed economic jolt.
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updated 3/7/2011 10:23:12 AM ET 2011-03-07T15:23:12

A new language can be heard on the slopes of this popular ski resort in northern Japan: Chinese.

Foreign tourists and investors have flocked to scenic Niseko in recent years, giving this rural region a badly needed economic jolt. It is a rare success story that, if replicated, could help lead Japan out of two decades of stagnation.

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Australians were the first to arrive in the early 2000s, followed by skiers from Hong Kong, Singapore and elsewhere in Asia. Mainland Chinese, while still relatively few, are the latest — and potentially the biggest — wave.

"This place has so much potential. It's such a nice break from the chaotic situation in China," 48-year-old Guy Cui, a Beijing resident in the financial industry, said as he stepped out of a spacious, modern cabin and squinted in the sunlight.

Last year, he came with 25 friends and relatives over the Lunar New Year holiday. This year, the group swelled to 52. "This is the trend of the future," Cui predicted, prompting a friend to joke that Niseko will be overrun with Chinese in 10 years.

In some ways, what's happening here is a reversal of roles: 20 years ago, Japan was dispatching rich tourists and buying up trophy real estate around the world, prompting people to worry that Japan Inc. would take over the world. Now, Japan's growing dependence on China and other newly wealthy neighbors is creating some consternation at home.

"It's rather like the American fear of the Japanese in the late '80s. It's fear of these rich outsiders coming in and dominating," said Alex Kerr, an author and sustainable tourism consultant in Japan. "That's what happens when a country that thought of itself as the unquestioned dominating leader suddenly discovers that there are others with more money."

Japan has set the ambitious goal of tripling its number of foreign tourists from 8.6 million last year to 25 million by 2020. With its population shrinking and economy flat, Japan must open up to trade, investment and tourism, Prime Minister Naoto Kan declares, if it is to reverse a slow decline. But it's a tall order in this historically insular country.

Foreigners account for about half the hotel nights in Niseko during the winter, and they're snapping up condominiums too. Major developers from Hong Kong and Malaysia plan to turn the place into an Asian Whistler, the Canadian ski resort.

Residents welcome the new money but worry about overdevelopment, the environment and, in particular, China's rise.

Japanese media have played up Chinese purchases of forest land around Niseko, spurring rumors that the buyers plan to strip the hills of lumber and drain the streams of water — fears that appear to be unfounded.

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"We're not sure who's doing what with that land," said Yukio Yamamoto, a Niseko native whose house now stands in the shadow of sleek holiday condominiums. "We want people to come here to the community and invest in it and care for the land."

Area was once quite popular
Set amid rolling hills on the island of Hokkaido, Niseko has plenty going for it: hot springs, clean air, fresh seafood, stunning views of Mount Yotei — an extinct volcano that resembles Mount Fuji — and 45 feet of powder snow a year, one of the highest levels among resorts worldwide.

It was popular among Japanese during the country's economic heyday, but went into decline after domestic skiing peaked in the early 1990s. Now, the main village of Hirafu has morphed into a bustling hodgepodge of condominiums, cabins and pubs with a distinctly international feel.

In early February, the place was swamped with families from the Chinese-speaking world, particularly Hong Kong, for the Lunar New Year, marked with fireworks at the base of Mount Annapuri.

Property agents say Hong Kong and Singapore buyers account for 70 percent to 80 percent of condominium and land purchases, with interest emerging from Malaysia and mainland China. Japanese developers are largely absent, still gun-shy from an early 1990s property market collapse.

"The Japanese are complacent," said C.J. Wysocki, a Hong Kong-based American lawyer for GE's aircraft business. He built an apartment building with 10 units in Hirafu and sold several to wealthy Asians. "The foreigners are the ones who are saying this place is amazing, it needs to be preserved."

Foreign tourists spent nearly 200,000 hotel nights in area accommodations last winter, up from just 7,800 eight years ago, according to the Niseko Promotion Board, which has hired Korean and Chinese speakers to field questions and maintain its foreign language websites.

Mainland Chinese visitors accounted for 6,100 nights and are expected to top 40,000 within five years, said Tomokazu Aoki, the board's deputy administrative director.

Hokkaido has seen a spike in Chinese visitors after the 2008 hit movie, "If You are the One," which introduced the island's rugged beauty to Chinese viewers.

They aren't big skiers yet — most hopscotch the island on bus tours to hot springs, lakes and discount shopping centers. But the sport is catching on — 20 million now ski, up from 5 million a couple of years ago, the China Ski Association estimates — and demand for resort vacations is expected to increase.

"The wealth will grow, the skiing population will grow, people will want to be more international," said Thomas Liu, a Hong Kong native who lives in Beijing and came to ski with his family.

Malaysia's YTL Corp. bought one of Niseko's four main ski areas, including the Niseko Hilton, for $66 million last year. Pacific Century Premium Developments, the real estate arm of Hong Kong businessman Richard Li's PCCW, bought the nearby Hanazono Resort in 2007.

Both plan upscale condominiums and villages with boutiques and fine dining to remedy the lack of shopping that is essential to drawing Asian tourists.

"Niseko is such a natural destination for what we call new wealth," said Francis Yeoh, the managing director of YTL, who likened Niseko's potential to the beach resorts of Bali in Indonesia or Phuket in Thailand.

Chinese spend big money
Mainland Chinese are coming to Japan in record numbers — 1.4 million last year, second only to South Koreans — and they are collectively the biggest spenders. Snapping up cameras, cosmetics and handbags, they make up about a quarter of foreign tourist consumption.

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Still, many experts are skeptical that the Niseko formula will work in the many hot springs and ski towns that are in slow decline. Many resist foreign influence, and Kerr calls them "hopelessly old-fashioned."

Hakuba, a ski resort in central Japan, has seen an increase in Australians, but many residents feel strongly about protecting the local culture and don't want change, said Yasuaki Enari, deputy director general of the Hakuba Tourism Bureau.

"Tourism is going to be a massively important industry for Japan in the future, and people haven't caught on to that yet," Kerr said. "The few places like Niseko that have really picked up on it are going to see an economic boom" while the rest will be in trouble in 20 years.

The arrival of Chinese tourists has sparked culture clashes in Hokkaido.

Shopkeepers and hotel operators complain about Chinese talking loudly in public, cutting in line and taking food from buffets back to their rooms, which is against the rules.

Chinese tourists counter that Japanese can be cold or give preferential treatment to other Japanese.

A pamphlet for foreign visitors from Sapporo, Hokkaido's capital, gives pointers on "doing things the Japanese way." That includes talking quietly, letting restaurants know if you need to cancel reservations and avoiding bargaining except at discount electronic megastores.

Some Japanese don't want to stay in the same hotels as other Asians, so establishments often must choose which market to pursue, said Kuniharu Sakai, deputy manager at a hotel popular with Chinese tourists on the shores of Lake Toya, not far from Niseko.

"We shouldn't push Japanese manners on them," he said. "We need to accept and understand them."

Tourists may ruffle feathers, but Chinese land buying triggers greater fears.

A government investigation found that Hong Kong companies bought 403 acres of forest land around Niseko in recent years, excluding the Pacific Century-owned land. Mainland investors are sometimes involved in such purchases, though officials don't know whether that's the case in Niseko. In any case, many Japanese lump together Hong Kong and mainland money collectively as "Chinese" in their minds.

Officials also suspect Chinese are behind the purchase of a 720-acre tract in central Hokkaido by a British Virgin Islands entity.

The buyers, many of whom haven't been publicly identified, often gave vague reasons for the purchases, "which makes us a bit concerned," said Takao Kataoka, chief of the forestry planning section in the Hokkaido government. That's prompted calls for limits on foreign purchases of land.

Marcy Zhang, general manager of Crispins Property Consultancy in Shanghai, which is promoting property in Hokkaido, said most of her clients are wealthy Chinese who want getaway places overseas.

"It's mainly investing in a way of life," she said.

Japanese wariness of Chinese intentions points to the strained relations between the two Asian powers since Japan invaded China in World War II. A territorial spat between the two countries last fall led to a drop in Chinese visitors and reinforced fears in Japan about its neighbor's growing military strength.

Citing security concerns, Japan only flights from mainland China and Russia to Hokkaido's main airport only on weekends and two weekday afternoons, so they don't coincide with drills at an adjacent Japanese military base. Tourism officials say that creates a bottleneck.

"Many Japanese are wary of Chinese," said Masanobu Saito, the owner of Bang Bang, a popular Japanese-style pub in Niseko's bustling village of Hirafu.

His future is tied increasingly to China's: 70 percent of his customers are from either Hong Kong or the mainland. The dependence on foreigners makes Niseko vulnerable, too.

"Niseko is booming thanks to the Chinese," said Saitoh, who has begun studying Mandarin. "So if the Chinese economy were to take a hit, this place definitely would, too."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Photos: Beijing booms

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  1. That's a gusher

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  2. Place for prayer

    The highlight of Bejing's Temple of Heaven is the Hall of Prayer for Good Harvests. The hall is a circular wooden structure designed with a unique architectural style -- there are no nails, beams or crossbeams used. The hall was were emperors came to pray for good harvests on the 15th day of the first lunar month every year. (Feng Li / Getty Images) Back to slideshow navigation
  3. Forbidden no more

    Each year, thousands of tourists visit the Forbidden City in Bejing. The structure is the best preserved palace in China and is the largest palatial structure in the world. For more than 500 years, 24 emperors ruled over China from the Forbidden City, now also known as Palace Museum. (Andrew Wong / Getty Images) Back to slideshow navigation
  4. Perfect for a picture

    A Uighur couples takes a picture before the Gate of Heavenly Peace, while visiting the Forbidden City. (Christophe Boisvieux / Corbis) Back to slideshow navigation
  5. A palatial visit

    Tourists make their way inside the normally crowded Forbidden City, the famed landmark home of dynastic emperors in central Beijing. (Frederic J. Brown / AFP - Getty Images) Back to slideshow navigation
  6. A towering reflection

    A general view of the Jiaolou (Corner Tower) of the Forbidden City bathed in sunshine and reflected off of the moat surrounding the former imperial palace. (China Photos via Getty Images) Back to slideshow navigation
  7. Retracing historic footsteps

    A performer dressed in the imperial yellow costume of former emperors rehearses his steps with others during an imperial rites ceremony during the Chinese lunar new year holidays at the Temple of Heaven on Jan. 20, 2009. According to records, during some 500 years, various emperors performed more than 600 imperial rites ceremonies in the Temple of Heaven. (China Photos / Getty Images) Back to slideshow navigation
  8. Appreciating old times

    This picture taken on April 13, 2009, shows a old neighborhood in Beijing. That spring, thousands of workers in yellow helmets took to the streets of old Beijing for a major renovation of traditional houses, or at least those that survived the real estate frenzy of recent years. (Voishmel / AFP - Getty Images) Back to slideshow navigation
  9. A mix of ancient and modern

    These Bejing residents live at a Hutong, which are traditional alleyways that offer a glimpse at the city's history and old way of life. Hutongs were formed by the lines of traditional courtyard residences. Since the mid-20th century, the number of hutongs has dropped as new buildings and roads go up in the city. (Guang Niu / Getty Images) Back to slideshow navigation
  10. Line right up

    A cook prepares traditional old Beijing food in a traditional hutong neighborhood. (Teh Eng Koon / AFP - Getty Images) Back to slideshow navigation
  11. A Buddhist treasure

    A Tibetan Buddhist monk walks on the grounds of the Yonghegong, also known as the Lama Temple, a temple and monastery belonging to the Geluk School of Tibetan Buddhism in Beijing on March 10, 2010. The temple is one of the largest and most important Tibetan Buddhist monasteries in the world.

    The Temple has five large halls and five courtyards with beautifully decorative archways, upturned eaves and carved details. It has a treasury of Buddhist art, including sculptured images of gods, demons and Buddhas, as well as Tibetan-style murals. (Frederic J. Brown / AFP - Getty Images) Back to slideshow navigation
  12. Colorful caves

    Visitors view replica of parts of the Mogao Cave during the Dunhuang Art Exhibition at the National Art Museum of China on Jan. 21, 2008. The exhibition included recovered antres, original painted sculptures and their replicas, grotto fresco replicas, tiles relics and documents from Library Cave of Dunhuang.

    Dunhuang, located in Northwest China's Gansu province, is renowned for its fresco caves, where the Buddhist paintings and sculptures were created in the 5th to 13th century. (China Photos / Getty Images) Back to slideshow navigation
  13. Standing guard

    Statue of a high civil official, advisor to the emperor, stands on Spirit Way at Ming Tombs site in Beijing. The Ming Tombs, where 13 Ming Dynasty era emperors are buried, are listed as a UNESCO World Heritage Site. (Tim Graham / Getty Images) Back to slideshow navigation
  14. A towering landmark

    The Hall of Prayer for Good Harvests is shown through the Temple of Heaven. The hall is a cone-shaped wooden structure with triple eaves. Its blue-tile roof is an easily recognizable emblem of Chinese imperial architecture outside of the famed Forbidden City. (Feng Li / Getty Images) Back to slideshow navigation
  15. Old house of worship

    Chinese Muslims gather to pray in the Niujie Mosque in Beijing to celebrate Eid Al-Fitr, the end of Ramadan and monthlong fasting on Oct. 13, 2007. Thousands gathered at this, Beijing's oldest and largest mosque, for morning prayer and to feast in food stalls and dance in the street.

    The mosque, first built in 996, is the spiritual center for more than 10,000 Muslims in the area. (Peter Parks / AFP - Getty Images) Back to slideshow navigation
  16. A palace in ruins

    A man visits the ruins of Yuanming Yuan on Jan. 15, 2007 in Beijing. Yuanming Yuan, known as the Old Summer Palace, was composed of three independent gardens and covered an area of about 864.8 miles with up to one hundred landscape spots. It was sacked, looted and burned to the ground by the British and French troops in October 1860. (Guang Niu / Getty Images) Back to slideshow navigation
  17. Remembering a movement

    A Chinese paramilitary policeman stands guard in front of the Monument to the People's Heroes in Tiananmen Square in Beijing. The 10-story obelisk was built in the 1950s in memory of those who died during the revolutionary conflicts during the modern era.

    The lower part of the marble tower is decorated with marble bas-reliefs showing the Chinese revolutionary movement over the past 100 years. (Peter Parks / AFP - Getty Images) Back to slideshow navigation
  18. A futuristic take on the arts

    Chinese tourists view the Center for the Performing Arts, which was designed by French architect Paul Andreu and situated near Tiananmen Square. The center includes a 2,398-seat opera house, a 2,019-seat capacity concert hall and a 1,035-seat theater. (Mark Ralston / AFP - Getty Images) Back to slideshow navigation
  19. Getting theatrical

    An actor performs during a ahow at the Beijng Opera on Aug. 10, 2008. The opera consists of literature, music, dance, martial arts, fine arts, acrobatics and many other arts available. (Paula Bronstein / Getty Images) Back to slideshow navigation
  20. Shopping for deals

    Customers line up at an informal stall selling traditional Chinese shoes in Wangfujing Snack Street. The snack street forms part the famous Wangfujing Street, which was pedestrianized in 2000. The snack street is popular with both tourists and Beijing residents, and has a whole row of pretty, brightly illuminated stalls selling a variety of food. (Gideon Mendel / Corbis) Back to slideshow navigation
  21. Just golden

    Small statues of Chairman Mao are shown on sale in a tourist area of Beijing. Souvenirs with Mao's portrait can be found in parts of Beijing popular with foreign tourists. (Kevin Lee / Getty Images) Back to slideshow navigation
  22. Teaching and cooking

    Chinese chef Zhou Chunyi, right, leads a cooking class for three U.S. tourists at her traditional hutong-courtyard-style house in Beijing on July 12, 2008. Chunyi offers classes to foreigners interested in the Cantonese and Sichuan styles of cooking. (Mark Ralston / AFP - Getty Images) Back to slideshow navigation
  23. Preparing to roast

    A cook pours water over ducks before they are roasted at a Bejing restaurant. (Getty Images) Back to slideshow navigation
  24. A park fit for a dynasty

    People visit Beijing's Beihai Park, which is more than 1,000 years old and was built up through five dynasties as a royal garden. Beihai, which opened to the public in 1925, includes a 96.4-mile lake, pavilions and towers, and beautiful scenery. (Guang Niu / Getty Images) Back to slideshow navigation
  25. Waiting in 'Happy Valley'

    Tourists line up to go on the "Flume Ride" at Chinese theme park Happy Valley in Beijing. Happy Valley, the biggest amusement park in China, consists of six theme parks. The park, which took four years to build, hosts more than 40 recreational facilities.

    There are reportedly more than 2,000 theme parks in China, although the industry only started some 20 years ago, according to state media. (China Photos via Getty Images) Back to slideshow navigation
  26. Making friends

    Young visitors look at a giant panda at the Beijing Zoo, which houses rare Chinese animals, including the Golden Monkey, and selection of animals from around the world. The zoo is also a center of zoological research and conservation with a number of breeding programs. (Peter Parks / AFP - Getty Images) Back to slideshow navigation
  27. An artsy trend

    People visit the 798 Space gallery, part of the Chinese contemporary art compound called 798 Art District or Factory 798 in the Dashanzi district of Beijing. The area, which is named after a former electronics factory, Factory 798, was divided up by artists into galleries and studios. The area is a thriving hub of trendy cafes, glossy galleries and eye-popping prices for works by the Chinese artistic elite. (Valery Hache / AFP - Getty Images) Back to slideshow navigation
  28. A model city

    A man surveys a scale model of the entire city of Beijing. The display is a combination of photographic glass, which people can walk on, and exact scale relief models of the city. This impressive exhibition is at the Beijing Planning Exhibition Hall, a urban planning museum focusing on Beijing both new and old. (Gideon Mendel / Corbis) Back to slideshow navigation
  29. A twisted 'nest'

    The National Stadium, also known as the "Bird's Nest," hosted the opening and closing ceremonies of the 2008 Olympic Games and the Summer Paralympics and served as the main venue. The 91,000-seat stadium is the world's largest steel structure. (Goh Chai Hin / AFP - Getty Images) Back to slideshow navigation
  30. Irregular headquarters

    The Chinese Central Television's headquarters is seen amid thick fog in Beijing. The building was built in two buildings and then joined to become one building in 2007. (China Photos / Getty Images) Back to slideshow navigation
  31. A truly Great Wall

    Tourists stroll on the Badaling section of the Great Wall on the outskirts of Beijing on June 1, 2010. (Liu Jin / AFP - Getty Images) Back to slideshow navigation
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  1. Image: Scenes Of Beijing - The Host City Of The 2008 Olympics
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    Above: Slideshow (31) Beijing booms
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