MISASA, Japan — A plan by Chinese real estate developers to invest in this little mountain town has opened a window onto a Japanese crisis of confidence.
For locals here, the planned development — vacation homes for rich Chinese — is a welcome infusion of capital into a town that has been in decline since its heyday in the 1980s as a hot spring resort.
But seen from elsewhere in Japan — there have been news accounts in the national media, not all of them accurate — the investment is a menace to the area’s pristine forests and streams, a land grab that threatens the country’s natural resources and a chilling reminder of the expanding shadow cast by China, which recently surpassed Japan to become the world’s second-largest economy after the United States.
“Targeted by Foreign Money? Japan’s Forests for Sale,” was the warning title of a news program this month by the public broadcaster, NHK.
A fear that “China money” is buying up the Japanese homeland is spreading across this nation, fanned by news reports and a general anxiety over Tokyo’s fading economic prowess and an increasingly hostile wealthy neighbor. The amount of money invested is still small by China’s standards, but seems to be setting off an outsize reaction among the Japanese.
Tokyo’s recent retreat from the diplomatic face-off over the arrest of a Chinese trawler captain, and China’s suspension of shipments of vital industrial metals and minerals to Japan, have also put many Japanese on edge.
“I’m all for closer ties with China, but we need to be on our guard,” said Hideki Hirano, author of the book “Japan’s Forests Under Siege: How Foreign Capital Threatens Our Water Source,” which was published in March. “We need to be more vigilant about who’s buying what.”
Here in Misasa, however, nationalist rhetoric is often tempered by pragmatism.
“Rich Chinese spend money in ways that no longer exist in Japan,” said Kiyomi Kawakami, a local developer who plans to build 47 luxury homes in Misasa with partners from Shanghai.
“People warn me not to sell land to the Chinese,” he said. “But I run a business. If somebody’s buying, I’m selling.”
Whether in far-flung corners of Japan like Misasa or in corporate boardrooms, there is a realization that as the Chinese economy booms, Japan needs — even as it remains wary of — China’s money.
The sentiment is reminiscent of the way Americans feared Japanese economic imperialism in the 1980s, alarmed by the acquisition of United States icons like Rockefeller Center by Mitsubishi and Columbia Pictures by Sony.
Chinese companies spent $120 million in the first half of this year to acquire various small and midsize Japanese enterprises, taking advantage of depressed asset prices, according to a recent report from Goldman Sachs. The figure represents a sixfold increase from the comparable period last year. China is also now Japan’s biggest trading partner, with overall trade surging by a third, to 12.6 trillion yen ($151 billion) in the first half of the year, compared with the same period last year.
“We shouldn’t think it a bad thing that foreign investors are recognizing value in Japan,” said Kazuhiko Masumoto, an analyst at the Mitsubishi Research Institute in Tokyo.
But Japan’s finance ministry has seemed slow to agree.
This month, Japan’s finance minister, Yoshihiko Noda, asked Chinese policy makers to “clarify their objectives” after recent bulk purchases of Japanese government bonds. Tokyo was concerned that the buying was helping to drive up the yen’s value — making Japan’s exports less competitive with China’s.
Bowing to economic realities, and Japan’s already high levels of public debt, Finance Ministry officials have since then played down the conflict, saying Japan was happy to find foreign takers of its government bonds.
Until the trawler dispute prompted some tour groups to at least temporarily cancel trips to Japan, waves of newly rich Chinese tourists, with pocketbooks open, had been welcomed in Japan — even while heightening a sense that the country is at the mercy of rich Chinese.
Reports of Chinese snapping up Japan’s mountains and forests have struck a raw nerve, however. Although Japan is known for its big cities, about 70 percent of its landmass is mountainous forest, and the purchases raise the specter of China’s gaining control of the cherished hinterlands.
Japan’s logging industry is in decline, as the country has been flooded with cheap imported timber. As a result, forest real estate now sells for rock-bottom prices, and many plots have been abandoned by absentee or aged owners and have fallen into a state of neglect.
In January, the Tokyo Foundation, a respected independent research organization where Mr. Hirano, the author, is an analyst, issued a widely read report warning that foreign brokers could extract natural resources like timber and water and threaten Japan’s national security.
“If we wait until the exploitation of Japan’s natural resources by global interests is well under way,” the report said, “it may be too late.”