| NANJING, China, Sept 14
NANJING, China, Sept 14 Tensions between China
and Japan are at their worst in years over rival claims on a
group of islands, angry crowds have overturned Japanese cars in
one Chinese city and a man ripped the flag off the Japanese
ambassador's car in Beijing.
But in shops and department stores in China's main cities,
there appears to be no let-up in the purchases of Japanese
gadgets, clothing and other products. Even in Nanjing, at the
heart of the historic animosity between the Asian giants, it's
business as usual.
"I don't like Japan but as the Western saying goes 'politics
is politics and economics is economics'," said a young man
walking out of an outlet of Japanese electronics retailer Yamada
Denki Co Ltd in downtown Nanjing, holding a shopping
"I care more about the quality of the things I buy."
He only gave his family name, Liu, and said he was 27 years
Chinese officials and media have fiercely attacked Japan for
the dispute over the islands, saying Beijing needs to take a
strong stance, including the use of military power if needed. On
Thursday, Chinese Vice Minister of Commerce Jiang Zengwei said
economic and trade ties could be affected by the row.
China is the world's second-biggest economy and Japan is the
third-biggest. Any disruption in their ties could have
consequences for the global economy, which has already been
buffeted by the debt crisis in Europe and the lack of a cohesive
recovery in the United States.
But so far there has been little evidence to suggest such
rhetoric is affecting the man on the street. In Shanghai and
Beijing, demand remains steady for Japanese goods and
Even in Nanjing, the site of the 1937 Nanjing Massacre by
Japanese troops and where anti-Japanese sentiment runs high
compared with most other Chinese cities, people were queuing up
in front of Japanese restaurants.
Shop owners and sales clerks said there had been no let-up
in the crowds at Japanese shops and restaurants near Xinjiekou,
one of the busiest shopping districts in the city, since
tensions spiked this month after Japan said it was buying the
islands from its private Japanese owner.
But the risk is rising that Japanese businesses, which are
already having to confront a slowdown in China's economy, will
be affected by the row.
"The economic impact between the two countries will depend
on the Chinese government counter-measures," said Yu Jingping, a
professor at Nanjing University's School of Economics, adding
that tensions between the two countries were at their highest in
"I think the impact could be incredibly big."
Tadashi Yanai, chairman and president of Japan's Fast
Retailing Co, Asia's largest apparel retailer, told
Reuters last week that Japan's strained ties with its neighbours
were a source of anxiety while some Chinese travel agents have
been reported to be cancelling tours to Japan.
Japanese businessmen say an increasing number of Japanese
firms are refraining from, or being asked by local Chinese
officials to cancel or postpone, large-scale sales promotions,
news conferences and other public events due to the territorial
Earlier this week, the Shanghai municipal government
renamed a marathon scheduled for December to exclude the name of
the Japanese sponsor, Toray Industries Inc.
"Many Japanese firms are worried about the economic slowdown
in China and they are eager to boost demand among the
consumers," said Hiroyoshi Ikeda, chief executive officer of
MYTS Group, which provides consulting and accounting services to
Japanese companies in China.
"So obviously the fact that they can't hold large-scale
promotion campaigns now will be a blow."
A CONVENIENT EXCUSE?
Nissan Motor Co Ltd's Chief Operating Officer
Toshiyuki Shiga said last week that Japanese car manufacturers
were having difficulty in holding big, outdoor sales promotion
campaigns, and that may have hurt August sales.
But quantifying the extent of damage the territorial dispute
is having on companies is not easy, especially as China's
overall economic growth is slowing.
Wang Zhaoshen, a sales manager at a Nissan dealer in
Nanjing, said the political tension had not had much impact on
sales so far and that the slowdown in the overall market was a
"He (Shiga) must be using it as an excuse," he said, adding
rising labour costs and petrol prices were the real problems for
But just across the road, a manager at a Toyota Motor Corp
dealership said 5 percent of his clients had cancelled
purchases since the flare-up in tension, citing the island
"I don't know if that's the real reason and there's no way
of finding out," he added.
While economic trade between Asia's two biggest economies
has continued to grow over the past decade, Japan's behaviour
before and during World War Two, when it occupied much of China,
remains an unhealed wound for many Chinese.
"As a Nanjing native, I've always felt animosity towards
Japan because of the massacre," said Liang Yan, 30.
She said she prefers to buy non-Japanese goods but
reluctantly chooses products like cameras and lenses from
Japanese manufacturers because of their high quality.
"If China gets stronger and its product quality improves,
I'll consider switching to Chinese products."