CHINA TRIES TO HURT JAPAN ECONOMICALLY OVER THE SENKAKU-DIAOYU ISSUE
During the anti-Japanese protests over the Senkaku-Diaoyu Islands in September 2012 protesters smashed Japanese cars, looted Japanese stores and attacked Japanese companies and called for boycotts of Japanese businesses and products. Some major Japanese firms such as Toyota and Honda temporarily shut factories and offices across China.
Louise Watt of Associated Press wrote: “Protesters torched a Panasonic factory and Toyota dealership in the eastern port of Qingdao, looted a Heiwado Co. department store in the southern city of Changsha and ransacked Japanese supermarkets in several cities. Though larger numbers of police imposed more order on demonstrations, they fired tear gas to subdue rowdy protesters in the southern city of Shenzhen. In nearby Guangzhou city, protesters broke into a hotel that was next to the Japanese Consulate and damaged a Japanese restaurant inside. [Source: Louise Watt, Associated Press, September 17, 2012]
Japan has demanded that China ensure the safety of Japanese citizens and businesses. "Unfortunately, this is an issue that is impacting the safety of our citizens and causing damage to the property of Japanese businesses," Japanese Prime Minister Yoshihiko Noda told NHK, Japan's public broadcaster. [Ibid]
China's National Tourism Administration ordered travel companies last week to cancel tours to Japan over the weeklong National Day holiday in early October and promised to compensate any businesses for costs they could not recover, said a lawyer who saw the written order and asked not to be identified because the document is not for public use. The scale and violence are the worst in recurring waves of anti-Japanese protests since 2005, when lingering grievances over Japan's occupation of parts of China in the 1930s through World War II brought Chinese into the streets. Since then, China's economy has supplanted Japan's as the world's second largest and its diplomatic clout and military firepower have soared. State broadcaster China Central Television on Sunday showed Chinese naval forces conducting firing drills in the East China Sea, though it did not give a date for the exercises. [Ibid]
State media, which answer to the ruling Communist Party, joined ordinary Chinese in calling for boycotts of Japanese goods. One regional newspaper ran a list of well-known Japanese brands along with calls for a boycott. China Central Television halted advertisements for Japanese products on two of its main channels over the weekend, according to China National Radio. [Ibid]Nissan President and CEO Carlos Ghosn told reporters in Hong Kong last week that though so far the dispute had not had a discernible impact on sales in China, it might if it degenerates "into something more serious."
Perry Link wrote in the New York Review of Books, Chinese protests have reached some peculiar extents. A Chinese clothing store called Pattad offers a 15 percent discount to anyone who enters and yells, “The Diaoyu Islands belong to China!” (You get 20 percent off if you yell “Japan belongs to China!”) A boy interviewed on the street says, “When I grow up I want to build tanks to annihilate Japan.” [Source: Perry Link, New York Review of Books, September 20, 2012]
Olga Khazan wrote on Washington Post: “Chinese citizens are also taking their fury all the way to Cupertino, Calif. After maps on the newly released iPhone5 listed the islands as part of Japan’s Okinawa Prefecture, hundreds of thousands of outraged users on China’s microblogging network Weibo called for iPhone boycotts, the Atlantic reported. Chinese netizens apparently feel the map listing reveals America’s true stance on the islands issue, even though the U.S. has so far attempted to remain neutral. Pan Xinyi De Weibo wrote, “It is the United States supporting Japan from behind that Japan dares to buy the Diaoyu islands,” according to the Atlantic. [Ibid]
Impact of Chinese Economic Pressure on Japan Over the Senkaku-Diaoyu Issue
Louise Watt of Associated Press wrote: “Imports from Japan are off 6 percent so far this year compared with the first eight months of last year, according to Chinese government figures. A manager of a Sony laptop store in Shanghai said fewer people were coming into his shop. "We sold more than 100 last month, while in these 13 days in September, we sold fewer than 10," manager Yan Long said last week. "We all know these products are made in China, but with a Japanese brand, but it's just the way it is." [Source: Louise Watt, Associated Press, September 17, 2012]
Calls for boycotts in previous rounds of China-Japan tensions have fizzled, so it's unclear whether this time will be any different. The Japanese and Chinese economies have robust trade and economic ties, and Japan is a major investor, its businesses providing jobs in manufacturing and services. A boycott or trade fight would likely hurt the Chinese economy at a time its growth is rapidly slowing and the Chinese leadership is worried about civil unrest. [Ibid]
At a Guomei electronics store in Beijing---teeming with flat-screen TVs, cameras and stereo systems---consumers seemed divided. "We should ban their products," fumed 70-year-old former soldier Sun Zhiyi as he left the store. "Japan's ambition is growing bigger and bigger. Our government is too weak." Others, however, praised Japanese products for their good value. "Their quality is good and I will still buy them," said 20-year-old bank clerk Yu Jinsheng, shopping for a camera. [Ibid]
In 2010, China temporarily stopped exports to Japan of rare earth metals used in high-tech manufacturing after Japan arrested a fishing boat captain whose trawler collided with two Japanese patrol boats off the islands. China could also threaten Japan with sanctions like it did with the United States in 2010 over Taiwan or cancel trade delegations, but this is unlikely because it could have a detrimental effect on trade relations, said Sarah McDowall, a London-based senior Asia-Pacific analyst at IHS. [Ibid]
Beijing is treading a careful line, wanting to pressure Japan over the islands and appear a staunch defender of Chinese national interests, without encouraging violence. Protesters in Beijing and several other cities carried portraits of Chinese revolutionary leader Mao Zedong. Though the current leaders use Mao as a rallying symbol, his radical policies have been abandoned and so carrying his poster is a safe, backhanded way of criticizing the government. [Ibid]
In the Muslim world, where distrust and hostility towards the West often runs deep, anger towards the United States and Europe is rarely taken out against foreign diplomatic missions, companies or factories. [Ibid]
Japanese Firms in China Shutter Offices and tell Employees to Stay Home
In the midst of the anti-Japanese protests in China, Reuters reported: “Major Japanese firms have temporarily shut factories and offices in China after angry protests flared across the country. [Ibid] The row between Japan and China, over a group of uninhabited islets in the East China Sea, has led to violent attacks on well-known Japanese businesses such as car-makers Toyota and Honda, forcing frightened expatriates into hiding and sending relations between Asia's two biggest economies into crisis. Ratcheting up tensions further yesterday, Chinese state media warned Japan it could suffer another "lost decade" if trade ties soured. Japan counted China as its top trade partner last year, with total two-way trade of more than US$340 billion.[Source: Reuters, September 18, 2012]
The protests focused mainly on Japanese diplomatic missions but also targeted shops, restaurants and car dealerships in at least five cities. Toyota and Honda reported arson attacks had badly damaged their stores in Qingdao. Japanese electronics group Panasonic said one of its plants had been sabotaged by Chinese workers and would remain closed through the memorial day in China when it marks the anniversary of Japan's 1931 occupation of parts of mainland China. Japanese electronics firm Canon Inc was stopping production at three of its four Chinese factories yesterday and today, citing concerns over employees' safety, Japanese media reports said, while All Nippon Airways Co reported a rise in cancellations on Japan-bound flights from China. Many Japanese schools across China, including in Beijing and Shanghai, have cancelled classes this week. [Ibid]
The overseas edition of the People's Daily, the main newspaper of the Chinese Communist Party, warned that Beijing could resort to economic retaliation if the dispute festers. "How could be it be that Japan wants another lost decade, and could even be prepared to go back by two decades," said a front-page editorial in the newspaper. China "has always been extremely cautious about playing the economic card ", it said. "But in struggles concerning territorial sovereignty, if Japan continues its provocations, then China will take up the battle," the paper said. [Ibid]
Yasushi Kouchi, Yasuharu Seki and Kenichi Yoshida wrote in the Yomiuri Shimbun, “Many Japanese living in China stayed home as anti-Japanese protests entered the eighth day since the Japanese government purchased some of the Senkaku-Diaoyu Islands. The day also fell on the 81st anniversary of the Liutiaohu Incident, which led to the Japanese setting up a puppet government in Manchuria. In Beijing, many Japanese companies and restaurants covered their names with Chinese flags in the hope they would not be targeted by anti-Japanese demonstrators. Some Japanese restaurants even posted signs stating, "Diaoyu are part of China's territory." Diaoyu is the name China gives to the Senkaku-Diaoyu Islands. [Source: Yasushi Kouchi, Yasuharu Seki and Kenichi Yoshida, Yomiuri Shimbun, September 19, 2012]
A 43-year-old Japanese woman, who has worked at a Japanese-affiliated company in China for years, said she had a terrifying encounter with demonstrators. "When I was passing protesters, they asked me where I came from. I instantly replied I was South Korean," she said. "I won't take a taxi as I fear the driver would find out I'm Japanese. I don't utter a word aboard buses." In Shanghai, home to the largest Japanese community in China with about 56,000 long-term residents, Japanese schools were closed..... Many kindergartens have also closed. [Ibid]
"I'm concerned anti-Japanese sentiments will escalate rapidly," said a Japanese employee of a Japanese manufacturer, who stayed home Tuesday with his wife and child. "We are very worried about the situation." A Japanese employee of another Japanese manufacturer, whose head office has ordered its workers in China to stay home, said he had stocked up on food at a supermarket dealing with Japanese products. "We can stay at home for at least one week," he said. "We're preparing for an emergency because nobody knows what will happen in China."
In Guangzhou, where anti-Japanese protesters turned violent, the local Japanese school closed for a few days, while some Japanese companies ordered their Japanese employees to stay home. [Ibid] A 37-year-old employee of a Japanese manufacturer, who has a wife and an 11-year-old son, said they would not leave their condominium . "Although I've been living here for five years, I've never felt such strong hostility toward us in China before," he said. "If the demonstration continues, I may think of sending my family back home as I'm concerned [about their safety]."
Japanese Books Removed from Sale by China in Row over Islands
Alison Flood wrote in The Guardian, “China and Japan both lay claim to the disputed islands known as theSenkaku islands in Japan and as the Diaoyu islands in China as does Taiwan. The dispute has now spread to the literary sphere, with bookshops in Beijing removing books by Japanese authors from their shelves,according to reports. [Source: Alison Flood, The Guardian, September 25, 2012]
The popular Wangfujing bookstore has pulled Chinese versions of Haruki Murakami's bestseller 1Q84, as well as other Japanese authors' titles, said the Japan Times. "We don't sell Japanese books," said a shop clerk, adding, "I don't know much about the reason, but perhaps it is because China-Japan relations are not good." Another large Beijing store was also getting rid of books by Japanese authors and those relating to Japan, according to Japanese newspaper the Asahi Shimbun. "It's because of the deteriorating ties between China and Japan," a bookseller was quoted as saying. [Ibid]
The Asahi Shimbun reported that the Beijing Municipal Bureau of Press and Publication had instructed publishers not to release books relating to Japan, or by Japanese authors, an allegation denied by the bureau. A source told the Guardian that at times of heightened sensitivity, it is common practice for the Chinese government to instruct retailers on what they can and can't sell. "There are instructions from time to time, especially at moments of internal instability, such as this, but they will be short-lived," said the source. [Ibid]
Tour Bookings to China from Japan Plunge 70 percent
Japanese airline JAL cut six flights a day between China and Japan after 15,000 people have canceled their flights. Some China-based travel agencies are canceling group tours to Japan. In late October 2012, the Yomiuri Shimbun reported: “The number of passengers who planned to visit China from Japan on tours in the three months from October nosedived more than 70 percent compared to last year, according to a survey by the Japan Association of Travel Agencies. The drop indicates the severe impact of the ongoing row between Japan and China over the Senkaku Islands on the travel industry. [Source: Yomiuri Shimbun, October 26, 2012]
For the survey, released Wednesday, JATA interviewed seven major domestic travel agencies, including JTB Corp. and Kinki Nippon Tourist Co., and asked them about their bookings for package tours for October to December compared with the same period the previous year. [Ibid] Reservations for tours to China dropped by 72.5 percent in October, 75.8 percent in November and 71.5 percent in December. The actual number of passengers who went on tours to China in September fell by 44.5 percent due to cancellations. [Ibid]
After a Chinese trawler collided with Japan Coast Guard patrol vessels off the Senkaku Islands in September 2010, the figures sank by 54.8 percent in November and 65.3 percent in December. However, a Japan Tourism Agency official said the repercussions of the Senkaku Islands row are more severe and widespread. There was also a fall in the number of people booking trips to South Korea due to the territorial dispute over the Takeshima islands, with the drop ranging from 46 percent to 66 percent in the three-month period. Another factor behind the decline was that it became difficult to reserve hotels in Seoul because many Chinese travelers went to South Korea instead of Japan. [Ibid]
“Senkaku Tuna” Brings Higher Price in Japan
Takaaki Suzuki wrote in the Yomiuri Shimbun, “Local fishermen have been working on the branding of fish caught in the waters off the Senkaku Islands in Ishigaki, Okinawa Prefecture, by registering them under a "Senkaku" trademark aimed at distributing them at higher prices and revitalizing the fisheries industry in the prefecture. In Tokyo's Tsukiji market, some fish shipped from Ishigaki are sold at auction with a tag that reads, "This fish was caught off the Senkaku Islands." In August, the Yaeyama fishermen's association in the city registered a "Senkaku Maguro" trademark for tuna caught off the Senkaku Islands after receiving a subsidy for the branding of fishery products from the Ishigaki municipal government. In the future, the association plans to promote the brand by making an original trademark logo and selling their products under the brand across the country. [Source: Takaaki Suzuki, Yomiuri Shimbun, November 16, 2012]
The usual market price for one kilogram of tuna ranges from 1,000 yen to 1,500 yen. "If we can sell the tuna for 1,000 yen higher than the normal price, the number of people engaged in the fisheries industry may increase," an official at the Ishigaki municipal government's fisheries division said. [Ibid]
According to the fishermen's association, high-quality fish such as tuna and longtailed red snapper can be caught off the Senkakus. However, among about 300 members of the association, only a few fishermen catch fish in the waters. Because the area is about 170 kilometers away from Ishigakijima island, it is difficult to make a profit due to the high fuel costs involved in traveling to and from the waters. [Ibid]
Aeon Reopens Riot-hit Store in China and Changes Its Name
In late November 2012, the Yomiuri Shimbun reported: “Aeon Co. fully reopened its ransacked Jusco store in Qingdao over the weekend and chose the occasion to announce a total rebranding of all its stores in China. Haruyoshi Tsuji, president of Aeon's Chinese subsidiary, said Saturday that all of its Juscos will be renamed Aeon on March 1. Aeon did the same with its Jusco stores in Japan in March 2011. "We lost many things during the sad events of September, but your enthusiasm for reopening the store has given us courage and hope," Tsuji told the staff before Jusco Huangdao reopened for business. He also told them to bolster community ties in the major seaport, which serves Shandong Province. [Source: Kyodo, Jiji, November 25, 2012]
The store was ransacked by protesters Sept. 15 who were angered by Japan's nationalization four days earlier of the disputed Senkaku islets in the East China Sea. Beijing and Taiwan fiercely dispute the sovereignty of the isles, which they call Diaoyu and Tiaoyutai, respectively. [Ibid] The store took about ¥700 million in damage, including broken refrigeration facilities and shelves. Most of it was covered by insurance, Aeon officials said. [Ibid]
The reopening was kicked off by a lion dance while employees handed out free cabbages, which are believed to bring good luck in China. At the news conference for the reopening, Tsuji vowed to step up corporate citizenship efforts in areas that host its stores. "The risks (of attack) will not decrease unless Aeon stores become truly indispensable to their communities," he said.Although the Chinese unit has participated in social activities, such as by helping plant trees at the Great Wall of China, the attack on Jusco Huangdao made it clear that Aeon's corporate citizenship efforts have been woefully insufficient, Tsuji said. [Ibid]
A 42-year-old woman who lives nearby welcomed the reopening, praising the store's wide range of goods and frequent discounts. A man passing by said that though he usually shuns violence, it is important for Chinese to demonstrate their love for the nation.Despite the damage, Aeon continued to pay its 370 or so employees at the store, which partially reopened in early October. "Since the attack, the supermarket has received many inquiries and requests from local customers about quickly resuming operations," Aeon said in a statement. "Supported and encouraged by such sentiment, employees at the store, together with those of the Aeon group, made their utmost efforts toward repairing and reopening for business."
Treating the Jusco Huangdao reopening as a "fresh start," the Aeon group intends to launch discount campaigns at all of its Chinese outlets in December. Aeon runs 36 Juscos across China and Hong Kong. To attract more customers, Aeon said it also plans to open 10 new shopping malls in China by 2015. Among other Japanese retailers, Heiwado Co. has reopened all three of its riot-hit stores in Hunan Province. [Ibid]
Events in China Cancelled because of the Senkaku-Diaoyu Island Dispute
A number of events were canceled or postponed because of the Senkaku-Diaoyu island dispute. Yasuharu Seki wrote in Yomiuri Shimbun, “In response to the Japanese government's move to nationalize the Senkaku Islands, several Japan-China exchange programs have been canceled or postponed. For example, China has informed the organizer of the JATA Tourism Forum and Travel Showcase 2012, days before it began in Tokyo, that it would not participate in the event. Meanwhile, a Japan-China seminar on copyrights, which would have taken place at a Tokyo hotel, was also canceled. [Source: Yasuharu Seki, Yomiuri Shimbun, September 15, 2012]
The Japan-China forum on art and culture, which was scheduled 25 in Beijing as part of 40th anniversary celebrations of the normalization of diplomatic relations between the two countries, will be postponed. A Bon Odori dance event scheduled for Sunday in Changchun, Jilin Province, and a series of exchange events for Japanese and Chinese journalists that was supposed to start Monday and last through Sept. 26, have also been postponed. The Washington Post’s Chico Harlan reported “cultural events in both countries designed to mark the 40th anniversary of China-Japan diplomatic ties have been called off.
Chinese Film Pulled from Tokyo Festival and Japanese Runners Banned from Beijing Marathon
Ben Child wrote in The Guardian, “A Hong Kong-Chinese film has been withdrawn from the Tokyo international film festival owing to ongoing political tensions between China and Japan, reports Screen Daily. Festival organisers announced on Tuesday that Yim Ho's Floating City, a Cantonese-language drama chronicling the meteoric rise of an illiterate man (played by Aaron Kwok) from a local fishing family to a powerful figure in Hong Kong's corporate world, would not after all be screening in the Japanese capital next month. [Source: Ben Child, The Guardian, September 26, 2012]
"It is with great regret that we have to announce the cancellation of the scheduled screening of Floating City at the 25th Tokyo international film festival owing to certain reasons on the production side," a statement read. "Although we have strongly requested those involved not to call off the plan to take part in the festival, the cancellation has unfortunately been finalised." The move to withdraw Floating City countered suggestions by Tokyo international film festival chairman Tom Yoda last week that political tensions would not affect the festival. [Ibid]
The big budget Sino-Japanese co-production 1905 also appears to be another victim of the ongoing dispute over the islands. Starring Hong Kong's Tony Leung, and directed by Japan's Kiyoshi Kurosawa, the period action-drama was due to start filming in Taiwan in November but has now been postponed. Leung was due to play a loan shark who ventures from Guangdong province in China to Yokohama in Japan to recover debts from a band of anti-Manchu government revolutionaries. [Ibid]
Aya Igarashi wrote in the Yomiuri Shimbun, “After temporarily blocking Japanese runners from entering the Beijing International Marathon to be held Nov. 25 due to "safety concerns," the Chinese Athletic Association has made an about-face following a hail of criticism at home and abroad. When registration officially began online Friday, Japanese runners were effectively blocked because their nationality was not included as an option on the registration form. However, Japan was added as an option Saturday at midnight, and registration was closed before dawn Monday when the number of registrants reached the planned capacity of about 30,000 in both the full and half marathon categories. [Source: Aya Igarashi, Yomiuri Shimbun, November 13, 2012]
In September, large demonstrations took place in Beijing to protest the Japanese government's nationalization of some of the Senkaku Islands. At first, the association attributed its denial of Japanese runners to "safety concerns." The Japanese Embassy in Beijing protested the decision. [Ibid] Shen Chunde, the association's deputy director, later said: "Because Japanese runners basically applied through Japanese companies last year, no registration option for individual Japanese runners was provided [initially] this year."
China’s Boycotts IMF Meeting Held in Japan
In October 2012 failed to send high-level representatives to annual meetings of the International Monetary Fund (IMF) and World Bank held in 2012 in Tokyo in what seemed to be a boycott of the meetings because they were held in Japan. AFP reported: “China’s top level boycott of global financial meetings in Japan is a sign of things to come, analysts say, as an economically emboldened Beijing shows struggling Western nations it doesn’t need to play by their rules.[Source: AFP, October 14, 2012]
But while Tokyo was graced with global financial luminaries such as Timothy Geithner from the US and Wolfgang Schaeuble from Germany, China’s finance minister and central bank chief both stayed at home. Beijing gave no official reason for sending their deputies, with foreign minister Yang Jiechi telling reporters in Beijing only that “the arrangement of the delegation for the meeting was completely appropriate”. [Ibid]
Observers say China’s stay-away was the result of a spat with Japan over disputed islands, and points to Beijing’s calculated willingness to use its financial muscle to make a political point. “China made this decision by precisely weighing the disadvantages of the no-shows against the advantages of its presence,” said Yoshikiyo Shimamine, executive chief economist at Dai-Ichi Life Research Institute in Tokyo. “It was an example of how China won’t always act within the framework and doesn’t see any contradiction between such absences and its responsibility as a major power,” he said. [Ibid]
IMF chief Christine Lagarde rapped Beijing, saying it would “lose out” by not showing up, while World Bank President Jim Yong Kim urged the two countries to sort out their differences for the good of the global economy. China merely shrugged. In his report to a key committee that advises the IMF board, deputy central bank governor Yi Gang said the failure by Washington and Tokyo to fix their fiscal problems was the reason the global economy was struggling. “Uncertainties related to fiscal sustainability weigh on sentiment and confidence, negatively affecting consumption, investment, and hiring decisions,” Yi said. [Ibid] Image Sources:
Text Sources: New York Times, Washington Post, Los Angeles Times, Daily Yomiuri, Times of London, Japan National Tourist Organization (JNTO), National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.
© 2009 Jeffrey Hays
Last updated December 2012