business

Worst likely over for S Korea boycott effect on Japanese economy

32 Comments
By Satoshi Iizuka

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Sportswear maker Descente Ltd, meanwhile, has cut its earnings forecast for the current business year through March and now expects group net profit to plunge 82.3 percent to 700 million yen ($6.5 million), down from the previously forecast 5.30 billion yen.

So their net PROFIT "plunged!" SO? At least they are still making a net profit and are not in the red!

Bugs the hell out me me when I read lines like these. These corporations are making money hand over foot in many cases, and they complain when the PROFITS dont rise, year after year!

It's not like their employees are benefiting, and stock holders aren't going to get much if anything either because they didnt make enough, and THAT is the problem!

1 ( +5 / -4 )

The article makes out like some real damage was done - especially to the beer industry - to the Japanese economy just to make a headline, yet totally contradict that with the real situation:

While all four major Japanese brewers admitted they have been affected by the boycott, the impact on the industry overall has been limited as their shipments to South Korea account for only a small portion of their businesses.

But another major brewer, Suntory Beer Ltd, said the boycott has had almost no impact on its performance because shipments of its flagship The Premium Malt's to South Korea accounted for only around 0.5 percent of its entire beer business.

Fact is, South Korean sales didn't amount to much in the scheme of things for Japanese businesses operating there. They can boycott all they want, it's their loss, not Japan's, as stated here:

The sharp decrease in the number of visitors mostly affected South Korea's airlines and travel agencies, experts say.

Low-cost carrier Air Seoul Inc., a wholly owned unit of South Korean carrier Asiana Airlines Inc., plans to close half of its 12 offices in Japan, sources close to the matter said recently.

While this was probably a calculated loss for the South Koreans behind the boycott, they must admit that they got just as much as they gave in this situation. What a totally ineffective retaliation over South Korea being removed from a preferential list of countries that were allowed fast tracked (faster than usual) export approvals.

They are literally boycotting because they are no longer allowed to queue-jump for 3 particular sensitive materials. What a farce.

0 ( +10 / -10 )

Let those fools boycott.

Japan stay strong.

0 ( +10 / -10 )

Stupidity from the Koreans hasnt hurt Japan. The top quality beer will be sent to other markets crying out for Japanese beer. Korea's loss. Millions of other tourists are banging down the doors to get into Japan. Korea's loss.

It has hurt SK terribly, and Japan not at all. Thank you PM Abe and Cabinet for standing up to bullies... and winning!

-2 ( +10 / -12 )

"Fast Retailing Co's Uniqlo casual clothing chain became one of the biggest targets of the boycott."

but

Fast Retailing logs record profits on strong Uniqlo sales overseas

and

Asahi brand products were the No. 1 import beer for the eighth consecutive year through 2018 in South Korea,

but it seems to be difficult to retain the position this year due partly to the boycott,"

and so what:

Asahi still keen to keep buying months after $11 billion AB InBev deal

Asahi just dropped 11 b big ones to buy AbinBev

Who needs south Korea?

-2 ( +8 / -10 )

This article is completely out of touch with reality. South Koreans make up 24% (7.5 million) of Japan's foreign tourists. Today the JTA said the percentage drop in South Korean visitors, compared with the same month a year earlier, was 48.0 percent in August, 58.1 percent in September and 65.5 percent in October. Doesn't look like the worst is over from those numbers.

And don't think China is not paying attention. The next misstep by this inept government on the China file will dealt with in exactly the same way...and bye bye tourist industry.

@alwaysspeakingwisdom(sic) "Who needs South Korea?"

Please talk to all the hotel, restaurant, shop owners etc. who are losing billions of yen in lost business and report back.

2 ( +11 / -9 )

The biggest losers of this trade war are Japanese semiconductor material vendors.

Both Samsung and SK Hynix plan to completely phase out Japan sourced materials by 3Q2020 to go Japan free.

Japanese vendors either have to move to Korea or watch 50% of their sales evaporate.

0 ( +12 / -12 )

Japanese vendors either have to move to Korea or watch 50% of their sales evaporate.

Or give up on business that is more risky and more troubles than it's worth.

They'd be better off to fill their sales by developing new clients in other areas, providing sales benefits for purchasing their products.

Dealing with a country that unilaterally decides their 'final and irreversible' agreements are actually not final and are reversible, just isn't worth the money.

-5 ( +6 / -11 )

@Strangerland

They'd be better off to fill their sales by developing new clients in other areas

There are like four countries on Earth investing heavily on semiconductors.

US

Korea

Taiwan

China

When Japanese suppliers lose Korea, they have nowhere else to sell their product. That 50% loss is gone forever.

-1 ( +10 / -11 )

Oh, Intel was the last US chipmaker standing, but is looking to get out of chipmaking business and outsource to Asian foundries like AMD's doing. Intel's next Core CPU Rocket Lake is first such product, to be fabbed at Samsung.

So when Intel's chipmaking operation withers, that leaves just Korea, Taiwan, and China as big chipmaking foundry investors. Exports to China carries as much restrictions as exports to Korea is now, meaning Taiwan is the sole market for Japan's semiconductor material business.

Soon, Japan's semiconductor material business will go the way of LCD plants.

-2 ( +9 / -11 )

There are like four countries on Earth investing heavily on semiconductors.

And one of them isn’t worth the troubles.

Morals are more important than profits.

-4 ( +5 / -9 )

The World's Top 8 Semiconductor Companies

1) Intel.

2) Samsung.

3) Taiwan Semiconductor.

4) Qualcomm.

5) Broadcom.

6) SK Hynix.

7) Micron Technology.

8) Texas Instruments.

Only two are Korean.

0 ( +5 / -5 )

Can’t get any worse is good news?

5 ( +7 / -2 )

@zichi

So you don't know much about the chip industry.

4) Qualcomm.

5) Broadcom.

Qualcomm and Broadcom are fabless companies whose chip production is outsourced.

8) Texas Instruments.

TI's semiconductor revenue is only $3 billion/year, less than 2 weeks of Samsung's revenue. Most of TI's revenue($10 billion) comes from analog electrical component. So TI is actually a minor minor semiconductor player.

3 ( +9 / -6 )

The only reasonable response to someone freaking out saying 'if you don't do what I say, I'll take my ball and go home' is to tell them to take their ball and go home.

The only reasonable response to a customer that expects you to let them abuse you, or they'll take their business elsewhere, is to tell them to take their business elsewhere.

If Korea wants to whine, even after saying that they finally wouldn't whine, as well as saying they would not reverse their decision to whine, and if they want to threaten GSomnia htis, and semiconductor that, let them. And let them whine as much as they want while they play with their ball and have to find elsewhere to buy their stuff.

The Koreans are deluded if they think this logic will work on an international level.

1 ( +7 / -6 )

Morals are more important than profits.

Morals? Defined by who exactly? Could you please give a clear example of any nation on this rock that places morals above profits. I'll wait.

3 ( +8 / -5 )

Morals? Defined by who exactly? Could you please give a clear example of any nation on this rock that places morals above profits. I'll wait.

Nations and profits? Are any nations profitable?

-4 ( +2 / -6 )

Japan has a strong domestic market that's self-sufficient and self-sustainable. Both Korea and China look risky due to their ignorant populace. Japan should focus on countries other than Korea and China for its imports and exports need. Any business from Korea and China should be treated as one time boon and never should be factored in the long term business plan.

1 ( +6 / -5 )

“The only reasonable response to a customer that expects you to let them abuse you, or they'll take their business elsewhere, is to tell them to take their business elsewhere.”

Exasperated by Japanese recalcitrance, Koreans are employing the only reasonable response to a former colonizing power that can’t get its head around the idea that it’s former subjects aren’t prepared to indulge the fantasy that there’s no unfinished business remaining.

2 ( +7 / -5 )

Oh dear me...

What now Koreans?

You supported and participated in the Japanese boycott. Tourism boycott, even athletes training together they had a boycott.

If you treat Japan nice we will treat you nice. Your good to us, we're good to you. That's the new policy starting 2020.

The days of nastiness towards Japan, disrespect, say one word in private then say something else in public is over and done with.

Give not one inch to half Korea.

2 ( +9 / -7 )

@AlrxBecu: anti-Japanese propaganda made by South Korea is one thing happening for example on YouTube for years. SK tried to destroy in any possible way Japanese soft power. I am always shocked by how Japanese noticed these things only now. SK copied Japanese pop culture to get the attention of kids who were into Japanese things, and once got their interest they started to brainwash them with the usual "Japanese evil imperialists who never apologized". Japan is now seen as a villain by many kids who before loved it. SK is basically boycotting Japanese interests internationally for decades in a very smart way, but it's like Japanese noticed it only now with these blatant actions. SK always hated Japan but at the same time it had the dream to become the new Japan: technologically advanced and with a strong pop culture, adored by the Westerns. They tried to accomplish that targeting young people who were already Japan lovers, slowly turning them into anti-Japanese.

-5 ( +4 / -9 )

Honestly, despite US interests, trying to turn SK into a Japan ally was an utopia in the first place. According to a recent poll, there are more South Koreans who would support North Korea into a war against Japan than vice versa. GSOMIA is a farsa and it's arrived the moment for the US to accept that SK will never see Japan as a friend.

-4 ( +4 / -8 )

Hope it stays that way for a while, I want to advantage of the cheap accommodation in both countries.

0 ( +4 / -4 )

This will blow over and Korea will look like idiots. Then, just when a high ranking Korean politician is nearing a scandal, back to the well it will go. Not a coincidence that Moon is in trouble politically and - just like that - the Japan-bashing started.

Cooler heads prevailed in this one.

0 ( +7 / -7 )

@Muratafan: Japan-bashing is part of South Korea identity. It's a thing for decades. Japanese noticed it only now, maybe because they are never interested in media in English, but media in English handled by SK are spreading anti-Japanese feelings for years.

-2 ( +8 / -10 )

Kudos to Korea for having the gumption to take the fight up to Japan and keep reminding it that there’s a long way to go before Japan’s moral debt for its horrendous mistreatment of Korea is expiated. In their heart of hearts, the decent people of Japan intuitively recognise that genuine rapprochement is not possible when it’s own leaders so transparently lack the necessary empathy and farsightedness needed to transcend myopic economic self-interest.

1 ( +6 / -5 )

Exasperated by Japanese recalcitrance, Koreans are employing the only reasonable response to a former colonizing power that can’t get its head around the idea that it’s former subjects aren’t prepared to indulge the fantasy that there’s no unfinished business remaining.

Um, Japan negotiated a "final and irreversible" agreement with Korea, in an effort to deal with said unfinished business. The Koreans agreed to that "final and irreversible" agreement by their own behest.

Korea then went on to unilaterally decide that agreement was not final, nor was it irreversible, and rather than even trying to negotiate a new "final and irreversible" agreement, they decided to antagonize the situation by suing Japanese companies, leading to this entire debacle.

It's pure and utter incompetence in the Korean government. Plain and simple. The Japanese tried to negotiate in good faith, and Korea shook their hand, then spit in their face.

Why would Japan waste time dealing with a country like that?

“The only reasonable response to a customer that expects you to let them abuse you, or they'll take their business elsewhere, is to tell them to take their business elsewhere.”

-3 ( +2 / -5 )

“Um, Japan negotiated a "final and irreversible" agreement with Korea, in an effort to deal with said unfinished business. The Koreans agreed to that "final and irreversible" agreement by their own behest.

Only in the minds of tone deaf apologists for discredited Japanese militarism or those seduced by Japan’s self-serving excuses was there ever a “final and irreversible” agreement. Taking pride of place in their grab bag of excuses for not attending to its unfinished business with sincerity, true contrition and humility, the 1965 agreement was the gift that kept on giving and giving.

The litmus test of this agreement was always going to be how well it addressed the damage caused by Japan’s manifold transgressions upon Korea’s sovereignity, even unto the present day, with a divided Peninsula that Japan contributed in no small part to making happen and for which it cannot shirk responsibility. Even though the amount of compensation was risible, especially compared to what Germany paid and continues to pay, it was gratefully received and put to good use by the erstwhile Japanese collaborator Park, now dictatorial President calling in favours. It was a bargain basement agreement however, doomed to fail because it was completely undemocratic in intent and very much in the manner of a hush money bribe. Devastated by its recently concluded (or not) war with the North, the Koreans were offered and accepted pennies on the pound. They can hardly be blamed for taking what little was on offer. As South Korea has matured into a fully fledged democracy with a thriving civic consciousness, the unravelling of the agreement was completely foreseeable. It’s still not too late for Japan to accede to the inevitable and acknowledge that the agreement was flawed.

0 ( +2 / -2 )

Na look who lost the black mailing tactics in US WTO n SK it's SK so time to use hearing aid n glasses to hear n see clearly n to smoke some legalized California weed for peace of mind SK as lies don't work in these modern world

-3 ( +0 / -3 )

South Korean generally make good products,

0 ( +4 / -4 )

South Korean generally make good products

“generally”? if we compare it to Japan i,m sorry to break your heart but no. and we,re not even talking on a global scale ( where we also have Western Europe and the US ), if we do that, we,ll see that SK is not so important like they think they are. of course this situation hurts Japan too but Japan can handle it while SK is playing being anti-Japanese and without realizing that they,re hurting themselves a lot more than ( they think ) they,re hurting Japan.

...economists say Japan has already seen the worst of its economic repercussions.

so that means it can,t get worse. it,s not a good sign when this is considered good news huh. eventually this boycott will go away but give them (south koreans) a few years and they will be anti-Japanese again (another boycott) (let,s hope not!)

-1 ( +1 / -2 )

Truth be told, if Japanese products weren't so expensive, most of the world would rather buy Japanese products than Korean or chinese. Japanese products are known for being more reliable. There is a sense of reliability and security knowing that your product has a "Made In Japan" label.

0 ( +1 / -1 )

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