Finance
Japanese concerts in China are getting abruptly canceled as tensions simmer
The Beijing music venue DDC was one of the latest to have to cancel a performance by a Japanese artist on Nov. 20, 2025, in the wake of escalating bilateral tensions.
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BEIJING — China’s escalating dispute with Japan reinforces Beijing’s growing economic influence — and penchant for abrupt actions that can create uncertainty for businesses.
Hours before Japanese jazz quintet The Blend was due to perform in Beijing on Thursday, a plainclothesman walked into the DDC music club during a sound check.
Then, “the owner of the live house came to me and said: ‘The police has told me tonight is canceled. No discussion,'” said Christian Petersen-Clausen, a music agent who has organized more than 70 concerts in China over the last 12 months.
“Everything Japanese is canceled now,” he said. He added that he’d spent six months getting Chinese censors’ approval to allow The Blend to perform in the country.
DDC announced Thursday afternoon that the evening’s concert was canceled due to force majeure and that ticket holders would be automatically refunded in the coming days.
Japanese singer-songwriter Kokia’s Wednesday evening concert in Beijing was also canceled, according to the venue. Its public announcement, dated Thursday, blamed technical issues.
Again, there was little advance notice. One social media post from a fan described waiting outside the venue for more than an hour, until well past the time the concert was scheduled to start.
Other concerts by Japanese artists in China have also been canceled or postponed this week.
It appears to be the latest fallout from an escalating spat between China and Japan over Prime Minister Sanae Takaichi’s Nov. 7 comments indicating Tokyo would support Taiwan if seriously threatened by Beijing’s military. Beijing claims territorial rights to Taiwan, a democratically self-governed island. Taiwan rejects this claim and says that only its people can decide its future.
“The pace and scale of Beijing’s reactions … are quite unprecedented,” said George Chen, partner of The Asia Group, a business policy consultancy based in Washington, D.C. He added that the biggest risk for Japanese brands in China would be a nationwide boycott, although so far there are limited signs that Chinese consumers are avoiding the brands at scale.
Two Chinese ministries late last week started warning citizens against traveling and studying in Japan. China’s Commerce Ministry on Thursday also threatened countermeasures against Japan if it “persisted on the wrong path,” according to a CNBC translation.
Mainland Chinese tourists have been the largest group of foreign visitors to Japan so far this year, and Nomura estimates bilateral tensions could cut the smaller Asian country’s GDP by 0.29%.
Limited policy communication
No ministry has publicly issued a ban on Japanese concerts, however. CNBC was unable to reach the culture ministry for comment as it was outside of Beijing business hours.
And it’s not just music that is potentially affected, with reports that Beijing will ban imports of all Japanese seafood — something China’s commerce ministry declined to confirm or deny. The foreign ministry has only said that, “under current circumstances, there will be no market for Japanese aquatic products even if they enter China.”
The developments reinforce how top-down policies in China can be abrupt and vague, making it difficult for businesses to plan.
“You don’t have predictability because nobody announces the policies publicly,” music agent Petersen-Clausen said. He said he organized a Japanese concert in Shanghai on Wednesday with no issue, and “nobody has said to us that Saturday[‘s concert] is for sure canceled.”
However, China’s rhetoric remains firm, with the foreign ministry on Thursday calling again for Takaichi to retract her remarks and warning that “if Japan creates trouble on Taiwan, Japan will not get away with it.”
“Basically what that means is, I have no hope for Saturday,” Petersen-Clausen added.
The venue had expected around 200 attendees on Thursday alone, he said, adding that around 20 Chinese people would have gotten paid for related work around both shows. Tickets for the jazz performance were listed at the equivalent of between $40 and $70 each.
The movie industry could also come under pressure. The local release of Japanese animated films featuring Crayon Shinchan and the “Cells at Work” series have been postponed, Chinese state news agency Xinhua said Wednesday. It cast the move as “prudent” based on falling Chinese interest in Japanese films.
“The risk to Beijing is that the perception that it has overreacted reinforces anti-China sentiment in Japan, as it did in South Korea,” Teneo analysts said in a report.
“If Beijing chooses to continue ramping up pressure over the incident, additional measures could include new barriers to imports from Japan justified by trade investigations or product safety concerns.”
Music an early target
Perhaps surprisingly, international music performances are often the first affected by geopolitical disputes.
Following Russia’s invasion of Ukraine in early 2022, some venues in the U.S. and U.K. canceled appearances or shows involving artists believed to be supportive of Russian President Vladimir Putin. China has also restricted large-scale Korean pop music performances for nearly a decade to protest a new missile system, although there are indications these acts could return soon.
For Petersen-Clausen, the uncertainty around concerts in China is hurting business.
“Foreign musicians have refused bookings from us because they said we don’t know if it will actually go ahead or be canceled,” he said. “This word has gotten around that China is sometimes unstable. That is a problem for us if we want to foster people-to-people exchanges.”
“If we don’t get stability and predictability,” he said, ”I’m going to have to disclose a very significant risk that is an unnecessary risk to potential investors.”
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Taylor Swift’s $2 billion Eras Tour did not include China, although Mariah Carey and the Black Eyed Peas both performed in the mainland this year. Chinese policymakers have sought to encourage some live events as a way to boost consumption and the overall economy.
But national leaders also have other priorities.
“Along with sports, music and arts are the first things governments ‘rediscover’ as a means to engage or re-engage,” said James Zimmerman, a lawyer in Beijing and former chairman of the American Chamber of Commerce in China.
“What happened to diplomacy?” he said. “These kinds of debates lead to an erosion of trust, which gets harder and harder to rebuild on both sides. We are seeing that in many bilateral relationships around the world.”
— CNBC’s Hui Jie Lim contributed to this report.
Cybersecurity and enterprise software stocks have been market dogs in 2026, with fears that AI will wipe out a wide range of companies in the enterprise space dominating the narrative. But they snapped a brutal losing streak this past week, joining in the broader market rally that saw all losses from the U.S.-Iran war regained by the Dow Jones Industrial Average and S&P 500.
Cybersecurity has been “a victim of some of the AI-related headlines,” Christian Magoon, Amplify ETFs CEO, said on this week’s “ETF Edge.”
It wasn’t just niche cybersecurity names. Take Microsoft, for example, which was recently down close to 20% for the year. Its shares surged last week by 13%.
A big driver of the pummeling in software stocks was a rotation within tech by investors to AI infrastructure and semiconductors and some other names in large-cap tech, Magoon said, and since cybersecurity stocks and ETFs are heavily weighted towards software companies, they were left behind even as those businesses continue to grow on a fundamental basis.
But Wall Street now has become more bullish with the stocks at lower levels. Brent Thill, Jefferies tech analyst, said last week that the worst may be over for software stocks. “I think that this concept that software is dead, and then Anthropic and OpenAI are going to kill the entire industry, is just over-exaggerated,” he said on CNBC’s “Money Movers” on Wednesday.
“Big Short” investor Michael Burry wrote in a Substack post on Wednesday that he is becoming bullish about software stocks after the recent selloff. “Software stocks remain interesting because of accelerated extreme declines last week arising from a reflexive positive feedback loop between falling software stocks and changes in the market for their bank debt,” he wrote.
The Global X Cybersecurity ETF (BUG), is down about 12% since the beginning of the year, with top holdings including Palo Alto Networks, Fortinet, Akamai Technologies and CrowdStrike. But BUG was up 12% last week. The First Trust NASDAQ Cybersecurity ETF (CIBR) is down 6% for the year, but up 9% in the past week.
Piper Sandler analyst Rob Owens reiterated an “overweight” rating on Palo Alto Networks which helped the stock pop 7% — it is now down roughly 6% on the year. Its peers saw similar moves, including CrowdStrike.
Performance of Global X cybersecurity ETF versus S&P 500 over past one-year period.
Magoon said expectations may have become too high in cybersecurity, and with a crowding effect among investors, solid results were not enough to to push stocks higher. But the down-and-then-back-up 2026 for the sector is also a reminder that when stocks fall sharply in a short period of time, opportunity may knock.
“Once you’re down over 10% in some of these subsectors, you start to see the contrarians start to say, ‘well, maybe I’ll take a look at this,'” Magoon said.
He said AI does add both opportunity and uncertainty to the cybersecurity equation, increasing demand but also introducing new competition. But he added, “I think the dip is good to buy in an AI-driven world,” specifically because the risks to companies may lead to more M&A in cyber names that benefits the stocks.
For now, investors may look for opportunity on the margins rather than rush back into beaten-up tech names. “I think investors are still going to remain underweight software,” Thill said.
But Magoon advises investors to at least take the reminder to keep an eye on niches in the market during pronounced downturns. “The best-performing are often the least bought and do the best over the next 12 months versus late-in-the-game piling on,” he said.
While that may have been a mindset that worked against the last investors into cybersecurity and enterprise software in mid-2025 when the negative sentiment started building, at least for now, it’s started working for the stocks in the sector again.
Meanwhile, this year’s biggest winner is also a good example of what can be an extended trade in either a bullish or bearish direction. Last year, institutional ownership of energy was at multi-year lows, Magoon said, referencing Bank of America data. “Reverse sentiment can be a great indicator,” he said.
But he cautioned that any selective buying of stocks that have dipped does have to contend with the risk that there is a potentially bigger drawdown in the market yet to come in 2026. That is because midterm election years historically have been marked by large drawdowns. “If you think it is bad right now, it could get a lot worse,” Magoon said. But he added that there’s a silver-lining in that data, too, for the patient investor. The market has posted very strong 12-month returns after midterm election drawdowns end. So, for investors with a longer-term time horizon and no need for short-term liquidity, Magoon said, “stick in there.”
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New innovation in the exchange-traded fund industry could come at a cost to investors during extreme conditions.
According to MFS Investment Management’s Jamie Harrison, ETFs involved in increasingly complex derivatives and less transparent markets may be in uncharted territory when it comes to violent downturns.
“Those would be something that you’d want to keep an eye on as volatility ramps up,” the firm’s head of ETF capital markets told CNBC’s “ETF Edge” this week. “As innovation continues to increase at a rapid pace within the ETF wrapper, [it’s] definitely something that we advise our clients to be really front-footed about… Lack of transparency could absolutely be an issue if we’re going to start seeing some deep sell-offs.”
His firm has been around since 1924 and is known for inventing the open-end mutual fund. Last year, ETF.com named MFS Investment Management as the best new ETF issuer.
“It’s important to do due diligence on the portfolio,” he said. “Having a firm that has deep partnerships, deep bench of subject matter experts that plays with the A-team in terms of the Street and liquidity providers available [are] super important.”
Liquidity as the real issue?
Harrison suggested the real issue is liquidity, particularly during a steep sell-off.
“We’ve all seen the news and the headlines around potential private credit ETFs. That picture becomes much more murky,” he added. “It’s up to advisors, to investors [and] to clients to really dig in and look under the hood and engage with their issuers.”
He noted investors will have to ask some tough questions.
“What does this look like in a 20% drawdown? How does this liquidity facility work? Am I going to be able to get in? Am I going to be able to get out? And if I’m able to get out, am I able to get out at a price that’s tight to NAV [net asset value], and what’s the infrastructure at your shop in terms of managing that consideration for me,” said Harrison.
Amplify ETFs’ Christian Magoon is also concerned about these newer ETF strategies could weather a monster drawdown. He listed private credit as a red flag.
“If your ETF owns private credit, I think it’s worth taking a look at, kind of what the standards are around liquidity and how that ETF is trading, because that should be a bit of a mismatch between the trading pace of ETFs and the underlying asset,” the firm’s CEO said in the same interview.
Magoon also highlighted potential issues surrounding equity-linked notes. The notes provide fixed income security while offering potentially higher returns linked to stocks or equity indexes.
“Those could potentially be in stress due to redemptions and the underlying credit risk. That’s another kind of unique derivative,” Magoon said. “I would very closely look at any ETF that has equity-linked notes should we get into a major drawdown or there be a contagion in private credit or something related to the banking system.”
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