Factbox: Japan-China economic ties hurt as relations sour

Wed Sep 26, 2012 12:39am EDT

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(Reuters) - A territorial row over a chain of uninhabited islands in the East China Sea has soured relations between China and Japan and spilled over to business ties between Asia's two largest economies.

Japanese automakers Toyota Motor Corp, Nissan Motor Co Ltd and Suzuki are curtailing production in China in the wake of anti-Japan protests that shut dealerships and darkened sales prospects in the world's top car market.

Airlines from China and Japan have cut or delayed flights between the two countries and Japanese businesses shut hundreds of stores and factories across China during the protests, some sending workers back to Japan.

Below is a summary of the economic ties between the world's number two and three economies.

ESTIMATES OF ECONOMIC DAMAGE

- Japan would log about 12 trillion yen ($154 billion) in annual losses in exports to China if shipments fell to zero for one month, according to the Daiwa Institute of Research.

- Daiwa calculates a total of 2.2 trillion yen of factory output would be lost under the same conditions. It also estimates that if Japan's auto exports stopped for a month, it would mean a loss of 144.5 billion yen.

- If anti-Japan demonstrations continued for a month and Japanese sales in China came to a halt for that period, it would reduce total sales by about 1.5 trillion yen, according to an estimate by SMBC Nikko Securities.

TRADE

- China became Japan's biggest export market in 2009, surpassing the United States. Japan's shipments to China accounted for nearly a fifth of its total exports in 2011 compared to less than 7.7 percent in 2001, according to Finance Ministry data.

- Japan is China's third-largest trading partner after the European Union and the United States and two way-trade between the two economies rose 11.7 percent in 2011 to a record $345 billion, according to China's General Administration of Customs.

DIRECT INVESTMENT

- Japan's outbound direct investment in China reached 1 trillion yen in 2011, up 60 percent from 2010 and above 726 billion yen recorded in 2005, Finance Ministry data showed.

- China's direct investment in Japan fell sharply to 8.9 billion yen last year from 27.6 billion yen the year before, but remained well above the 2005 level of 1.3 billion yen.

JAPANESE FIRMS IN CHINA

- Over 33,400 Japanese companies and affiliates were operating in China and Hong Kong as of October 1, 2011, up 75.4 percent from a year earlier.

- According to China's National Bureau of Statistics, there were 22,307 Japanese companies and joint ventures at the end of 2010, accounting for 16 percent of the total number of foreign companies in China and employing about 3 million people.

- China profits account for 25 percent of Nissan Motor Co's net profit, 21 percent at that of Toyota Motor, and 16 percent at Honda Motor, according to an estimate by Bank of America Merrill Lynch.

($1 = 78.25 yen)

(Reporting by Kaori Kaneko in Tokyo and Aileen Wang and Xiaoyi Shao in Beijing; Editing by Nick Macfie)

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