Japanese firms hurt by tensions with China, S Korea

Japanese companies and their products have been too successful in China. That is why the Chinese government is implementing this anti-Japan strategy. And fortunately for China, Abe appeared.

Some will say it's okay to reduce trade and investment in China/SK as long as SE Asia takes its place. But truth is Japanese economy could benefit greatly from trading with and investing in both.

While China and SK (unjustly in many people's eyes) continue to air 70-year old grievances against Japan, Japan isn't doing itself any favours by giving them fuel, with cabinet members visiting Yasukuni in droves, questioning past apologies, voting history revisionists into power.

No single party is at fault, but bottom line is Japanese economy is taking a hit, with flow-on effects on the average Japanese citizen. If Abe was a shrewd politician he thinks he is, he would put his nationalistic agenda aside and do what's best for Japan. History will remember him (among other things) as someone who set Japan - China/SK relations 30 years back.

If Abe was a shrewd politician he thinks he is, he would put his nationalistic agenda aside and do what's best for Japan.

Exactly. But in actual fact he's a blundering ignoramus who is only thinking about what plays well with the right-wing constituents that he and his like-minded colleagues rely on for votes and campaign funding.

Japan should go with the flow and shift investments from China to southeast Asia. All western nations should follow suit and stop feeding the Chinese fascist machine. State controlled companies can not be trusted and when they put he screws to you there is little chance of recourse. They do teach this in like first year of business school.

There's never going to be a good market with china. Chinese copy everythin without any remorse. Just like south Korea.

@Mitch Cohen. You wrote 70 years. Japan annexed Korea (we used to say our country stole Korea) and invaded China many years before 1945. In schools, we could say openly Shina shinryaku then.

Domestic consumption is going down, exports continue to decline...Japan market is becoming too small...so even if Japanese companies move to north west or south east it will hardly make any difference to China or rest of the world.

@kiyoshiMukaiJUL. 20, 2014 - 07:47AM JST

There's never going to be a good market with china. Chinese copy everythin without any remorse. Just like south Korea.

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Copying everything is not just China or Korea. Japanese way is look at models and rearrange, then create new way. Flower Arrangement, tea ceremony, katanas, even Buddhism and Shinto. In modern era, automobiles, computers, TV, cameras, new kind of x-ray machines, Difference between S Korea's method is Japanese do not cxopycat. So Apple can not sue Japanese companies. Ford, GM could not sue Toyota. People blame Yasukuni Shinto but Shinto was originally from China Oriental wisdom. Just Japan is smart that it changes and avoid lawsuits., Surely you don't believe Japan invented automotive and computer, etc.

Unfortunate Japan's economy has to 'depend' on two belligerent nations with nothing good or constructive to ever say about Japan.

It doesn't matter if it's Abe or anyone else, that's just a convenient excuse.

China/SK will forever hate on Japan no matter how many apologies are thrown their way (besides the dozens already given).

Mitch CohenJul. 20, 2014 - 06:57AM JST History will remember him (among other things) as someone who set Japan - China/SK >relations 30 years back.

You are wrong.. For the simple reason that most Japanese do not understand, and rightly so, why China after 42 years of friendship and goodwill suddenly decided to harp on WWII and "hate" them. The world shares this view as well. Only South Korea which is so reliant on China economically as to be subservient to their will goes along with it. Abe will be remembered as the PM who stood up to fascist China.

Difference between S Korea's method is Japanese do not copycat.

I agree that this is true now - but it wasn't true 30-40 years ago. Japan was famous as a copycat country. Remember all those Datsun cars? Or Ibanez guitars? The American market was flooded with cheap Japanese copies. It's a common feature across emerging economies. We saw it in Japan, Taiwan, Hong Kong and Korea in the second half of the 20th century. As with Japan, and other countries, these copies pave the way financially for strong domestic innovation. Of course there are differences - China can do it on a much bigger scale then any of these other countries ever could - worldwide IP rights are also stronger so it gets flagged up more frequently. But at the same time - we're criticising China for follow a very similar path to growth that we did.

and I am glad Abe did stand against CHina and Korea. Enough of this BS

China/SK will forever hate on Japan no matter how many apologies are thrown their way (besides the dozens already given).

With continual denials from Japanese leaders that their wartime predecessors (parents or grandparents in many cases) ever did anything bad at all, and continual efforts to either whitewash, justify or glorify their behaviour, they make themselves very easy to hate. An apology does not mean much if one politician makes it and then ten others immediately say they want to retract it.

Mr. Abe and his supporters are wearing blinders of their own making that prevents them from seeing themselves with any sense of objectivity, and they are totally unaware (or perhaps uncaring) of how Japan is looking in the eyes of the advanced world these days. This is wonderful! Keep it up, guys.

I've been working with my Chinese business acquaintances for about 12 years and they often tell me how they are exasperated with the stupidity of their government in creating a hostile atmosphere. The company I work for has factories in China and is increasing sales in China year on year although we are all afraid of a sharp turn for the worse. Abe calls himself friendly to business although he has to balance this with his pandering to the idiot rightists by winding up China. I can't see the CCP being removed as long as the economy keeps growing but Abe's approval ratings are already sinking below the 50% mark as the reality of his economic failure bites. Maybe the next leader, probably within 12 months, will take a different approach but the economic and foreign policy car crash that is Shinzo Abe will take a lot of clearing up.

“In late June, prominent academics, including Abe economic adviser Koichi Hamada tried to give the premier a “peace and security” proposal to improve relations with China and Korea, but their report was rejected, people familiar with the matter told Reuters.”

Here we go again, another piece of evidences shows that Abe, a fervent nationalist and revisionist cares more about his political career than long-term peace and prosperity for Japan as a whole.

In terms of Japan’s dwindling direct investment in China, other countries are filling up the vacuum left by Japan. For instance, S.K’s investment in China jumped 45.6% to $2.8 billion in the first six months this year, outstripping the Japanese. In addtion, UK, German plus the US have also step up to the plate to capture more market shares and eat Japanese lunch.

Here is the bottom line, the US does not like so many things Chinese regime does to its own people and its neighbors, but the US recognizes that Americans can’t simply ignore the second largest economy in the world as well as Chinese growing clouts when it comes to world’s order and peace. In other words, Americans have to be realistic and pragmatic.

I think sooner or later, wised-up J-govt will come to terms with its big neighbor.

It's ironic for all the love Right wingers declare for their country, they are very very skilled at destroying Japan's economy and international reputation for the stupidest reasons sometimes with their mouths.

@zorken: Japan is expert in copycatting and displaying like Japan created them. People blame China and Korea forgetting Japan has been doing so many centuries ago. Kanji, then hira gana, kata kana, Kimono, We used to wonder what Japan created in History classes. Pottery came from China, S Korea, Thai. Blacksmith. Abacus. Waraji, geta, zori. Chochin, odori. Back to China and Korea. In USA TV shows, old shows used to mention Made In Japan for anything cheap. Now they mention Made in China. Because of Korean high tech products, there is no mention of Made in Korea. Because of (C) Japan do not copycat anymore. Korea ignored and got sued by APPLE. Toyota? Toyoda was creating cars on his own, Mitsui heard, offered to buy his business and created Mitsui Toyoda and Mitsui created distribution networks. Then too many sales. So, Mitsui offered Toyoda to be independent. Toyoda changed name to Toyota (da and ta use same kanji) Now people only know Toyota. He did not copy. He just created 4 wheels on his idea added. Many Japanese corporations were like that. Copycatting eras were over with modernization of industries. Hardly copyright lawsuits because of Japanese habit of not copying exactly. Japan is slier than Korean.

@toshiko You're broadly right, and I'd agree with you a fair bit. But "Korea ignored and got sued by APPLE" - is a distortion. Samsung got sued by Apple - and the lawsuit isn't without problems. Korea is an innovator across several key markets - it's unfair to suggest that their primary output is copycat products.

This sums the idiocy of Abe's economic policies very well. To rebuild Japan's economy he has to rely on international markets, but he and his right-wing cronies have done nothing secure international markets for the economic recovery and have managed to P-off their biggest reading partners. Yeah, China carries on like a spoiled brat and South Korea follows, but these cronies need to rise above the petty squabbling and focus on rebuilding Japan's economy and reputation. All this crap about rewriting history books and downplaying the severity of Japan's imperial rule of Asia has to stop or Japan will fail.

As usual Simon engages in the notion that Japanese leaders en masse have denied past wrong doings.

Funny me, I could have sworn Abe himself recently reiterated Japan's accountability for its past wrong doings.

It's never enough for the anti Japan crowd.

slowguy2Jul. 20, 2014 - 09:42AM JST Mr. Abe and his supporters are wearing blinders of their own making that prevents them from seeing themselves with >any sense of objectivity, and they are totally unaware (or perhaps uncaring) of how Japan is looking in the eyes of the >advanced world these days. This is wonderful! Keep it up, guys.

Your comments do not reflect reality.

"Japan is the country most widely viewed as having a positive influence, and Europe as a whole gets the most positive ratings of all.The poll of 39,435 people was conducted for the BBC World Service by the international polling firm GlobeScan together with the Program on International Policy Attitudes (PIPA) at the University of Maryland"

"A BBC survey found that more than 76 percent of Germans, the highest rate among 24 countries polled, view China as exerting a mainly negative impact on the world. China also was viewed negatively by 73 percent of those polled in Japan, followed by France (68 percent), the U.S. (66 percent), Canada (64 percent), Spain (59 percent) and South Korea (56 percent)."

The costs of Abe`s idiotic nationalist pet projects coming home. This was of course entirely predictable and reinforce the obvious fact that these China/Korea bating policies do nobody any good.

Abenomics in a nutshell. Appease one group at the expense of the rest.

How are China and South Korea's grievances towards Japan unjustified? Japan is a country that committed the cruelest of crimes against humanity in the modern era towards these two countries. Even by the standards of Nazi Germany. Nothing can compare to the viciousness and inhumanity of Unit 731, Nanjing Massacre, rape and "discarding" of sex slaves, vivisection and beheading of Allied prisoners of war, etc.

You may say it was 70 years ago or longer, but the problem is Japan does not acknowledge the full extent of its crimes even today. And yes these are CRIMES. So the country really has not changed its basic mentality. See how there are Japanese people shouting, "Kill all Chinese! Kill all Koreans!" on the streets. Why should these Chinese and Korean people be killed again? What did they do to the Japanese? This kind of behavior is not accepted in any other modern country in the world. It is illegal. But you say it is only a few so they are tolerated.

And yet Chinese and Korean tourists come to visit Japan all the time and want to buy Japanese products and enjoy Japanese culture. Who is it that cannot "let go of the past", really? This is ATROCIOUS behavior to guests by a people who consider etiquette and manners so important.

Although 70 years may seem like a long time to Westerners, it is not a long time for Asians (and certainly not Japanese). Anyhow, some of the victims are still alive and live with the nightmares. If I were a "comfort woman", I certainly would not dare buy a Japanese product. But Toyota, Honda, Uniqlo, and Daiso do so well in China and South Korea. So who is it that is holding onto the past? Who is it that does not change? I say Japan.

Japan was the Nazi Germany of Asia. If japan had memorials like Germany of its asian victims, maybe China and south Korea wouldn't have to build their own. And now the economy is hurting thanks to right wing Japanese Nazis.

Shinzo Abe gets a lot of undue hate on this website when he's one of the best, most effective politicians in the world. The PRC does not like him because of that, the fact that he takes a hard line against PRC aggression, and also the fact that, despite this "China rising"-business, Japan is one of the only regional powers able to stand up to the PLAN and PLAAF.

Furthermore, am I the only one paying attention? Tensions with South Korea and the PRC are not new, and this recent flare up is Abe's fault. It was the DPJ, and the former mayor of Tokyo who started this whole issue in the first place. People who believe this recent flare up of tensions are mainly caused by historical revisionism by Japanese politicians are kidding themselves.

The only thing that would make things better at this point is if Abe were to agree that the Senkaku Islands are disputed, and that the PRC have a legal claim to them (which they absolutely do not). That is something Japan should not, and will not do.

And @toshiko,

The entire world copies off eachother, and Japan is no different. Buddhism, which became a core aspect of Chinese culture, originally came from India, for example. Also, Shintoist belief does not originate in China. The word comes from Chinese, but a proto-Shintoist belief most likely began during the Jomon period (and this culture did not originate in China).

Japanese firms hurt by tensions with China, S Korea

Good. Japan, and Abr in particular, need to realize that you can't have your cake and eat it too. You can't continue to demean and insult your trading partners to score points with your domestic audience, but still expect the consumers in those countries to buy your products. A global economy doesn't work that way.

@OssanAmerica

"Japan is the country most widely viewed as having a positive influence, and Europe as a whole gets the most positive ratings of all.The poll of 39,435 people was conducted for the BBC World Service by the international polling firm GlobeScan together with the Program on International Policy Attitudes (PIPA) at the University of Maryland"

Let's add the final sentence to that shall we - lest we be accused of manipulating data.

"The 33-nation fieldwork was coordinated by GlobeScan and completed between October 2005 and January 2006."

Last year Japan "saw its positive ratings drop from 58% to 51%".

As usual Simon engages in the notion that Japanese leaders en masse have denied past wrong doings.

Convenient for you to infer that, isn't it?

'Shinzo Abe....he's one of the best, most effective politicians in the world'

I just read this from Reuters: 'The cabinet made a landmark decision on July 1 to allow the country to exercise the right to collective self-defense. Regarding this major defense policy change, 51.6 percent people said no, only 33.4 percent showed approval.

In terms of support rate for political parties, Abe's ruling Liberal Democratic party (LDP) stood at 23.1 percent, down 4.1 percentage points from last month, a record low since the LDP took power.'

I don't know, these Japanese just can't see a good thing, eh? It looks like one of 'the best, most effective politicians in the world' is heading for the exit door for the second time as sneaky ways and much touted economic plan see the clear light of day. If he's one if the best in the world, god help other countries.

This is what abenomics, visits to shr inescapable and denials get you. Man up already japan.

The funny thing is South Koreans love buying Japanese consumer products ranging from Sony to Sanrio. But Japanese consumers are the only major consumers in the world who refuse to buy Samsung just because it is South Korean and they think "inferior". It is the only major market in the world like this. So "unique"! (Japanese love to call themselves unique!!!)

So why do Americans, Europeans, Latin Americans, Chinese, Russians, and all other people prefer Samsung now? It's because they are not XXX-headed like the Japanese.

And the Japanese say the South Koreans can get over things... Laughable.

I don't know, these Japanese just can't see a good thing, eh? It looks like one of 'the best, most effective politicians in the world' is heading for the exit door for the second time as sneaky ways and much touted economic plan see the clear light of day. If he's one if the best in the world, god help other countries.

Clearly the people voting you down don't have anything coherent or interesting to say in the way of a comeback, so I'll save them the trouble: anyone who annoys the Chinese must be okay. If Shinzo Abe had the genocidal tendencies of Adolf Hitler and wasn't just stupid and incompetent, it would still all be overlooked as long as he kept standing up to those ghastly, evil Chinese communists, who are clearly a whole lot worse than all of the other vile, despicable regimes the west has been so friendly with.

'Clearly the people voting you down don't have anything coherent or interesting to say in the way of a comeback,'

I was about to say something similar. Zorken was also thumbed down for quoting stats which certain people don't like ( I'm a little suspicious about the thumbs down on this topic - I wonder if 'the people' in your sentence should be singular ). Facts like Abe and the LDP seeing their approval ratings in a nosedive and Japan's positive image in the world also on the slide isn't what they/he/she like(s) to hear. China was seen as having a more positive influence in the world than the US in 2012 but the US overtook it by a narrow margin in 2013. I'm not sure how to spin that one but on the face of it could it be said that means the US and China are viewed pretty equally in terms of positive influence by people around the world. China is generally regarded as having the most negative influence in Japan and the US in particular but certainly not worldwide - the countries with the lowest ratings are Pakistan, Iran and Israel. Perhaps some people need to take a wider view.

But Japanese consumers are the only major consumers in the world who refuse to buy Samsung just because it is South Korean and they think "inferior"

Yeah, NOBODY uses a Galaxy in Japan, right? Jesus Christ.

China is a very difficult place to do business and there were many companies that should never have been there in the first place. No matter how you slice it, China has slipped in importance for companies.

i think china has been the main competitor now for US and Europe in terms of trade and investments. i don't really see how japan can replace china's growth and popularity in this current time and age. investing in china as well and perhaps s/korea is good, it is not a bad thing to do for any country including japan. they are closest to japan by the way, so the opportunities are there. but, whether japan seize that opportunity or not, maybe it is up for the leadership to be more aggressive in perhaps changing their economic and or political framework or mentality.

Kenjiooi July 19,2014 4:30P.M

I would like to ask Mr. Abe what he will make out of the reality ,as reported in this news item, involving the worsening of the bilateral relations with China to the point where Japanese corporations are paying for the latest visitb to Yasukuni followed by the re-interpretation of the no-war clause of the constitution. As long as he wears the hat as Prime Minister of Japan ,he must take a big-picture perspective on diplomacy, taking into account the national interests as a whole instead of giving top priority to focussing exclusively on a jingoistic, ultranationalistic take on the last war.

Funny that Japan is just realising it that there market share is being stolen by their so called allies .Some times u have to put ur arrongance away and weight wat is best for ur people in the long run

Take it as a warning sign of things to come and pull out of china, move things to more friendly nations.

Regardless of what abe or any other Japanese govt do ( sort of completely giving into the the bully china ) things will get no better, shift focus to other nations and cut the dragons head off.

If all the other trading partners of china realised what the bully is about and stopped trading with it, the dump would implode.

Millions of willing and able workers in SE Asia who would love to do the job.

Stop sending factory orders to china, stop sending the worlds resources to china, stop sending technology to china,, stop sending jobs to china and stop sending money to china, until it starts to play like a mature member of the world community.

When it treats its citizens properly, opens its press and media drops the censorship and stops threatening and bullying its neighbours, then trade with it. It is baffling why the world lets it do what it does but still trades with it, if there was any moral back bone china would be isolated.

What does "more friendly nations" mean? Does that mean countries that just don't care about Japan's past war crimes and denials or those that simply put up with it?

Why can't Japan just be a normal country?

kiyoshiMukaiJUL. 20, 2014 - 07:47AM JST There's never going to be a good market with china. Chinese copy everythin without any remorse. Just like south Korea.

Not fair to be critical of Korea and China when that's exactly how Japan got it's start in foreign car and electronics markets.

Here is a basic question: Do Japanese public and businesses communities want to have a better and larger piece of economic pie from its Japan's big neighbor? The answer is an absolutely yes. In fact, Japanese business groups have put lots of heat on Abe already, otherwise why Abe keeps making pleas for the summit and keeps sending his massagers to China, showing intend to mend strained business ties.

But as jerseyboy pointed out above “You can't continue to demean and insult your trading partners to score points with your domestic audience, but still expect the consumers in those countries to buy your products. A global economy doesn't work that way.”

Xi may be ruthless but he is not stupid as Abe may think he is.

Unless Abe does something right on Japan’s foreign policy , there is little prospect for Japan to regain all of the ground lost in Chinese markets since 2012. In additon, it's possible, Japanese companies from car makers to electronic producers may lose thier grips even more as japan's competitors from other countries step in to replace Japan in Chinese markets.

I've noticed that none of those who despise China and Korea on this thread have addressed the fact that Abe and the LDP are on the slide and that the view of Japan as a positive influence is also heading downwards. Perhaps they could tell us why this is. It seems the Japanese people, as reflected in the polls, are becoming more aware that this administration isn't benefitting the Japanese people. Those pointing this out are not always anti-Japan. I've lived happily here for 14 years with a lot of affection for the place and one of the great sadnesses for me is to see this administration accelerating the growth of the haves and have nots as well as reinforcing negative stereotypes of Japanese people as unrepentant for past violations. Abe is sinking and will be out of the door again. His first failure saw the coining of 'Abe suru' and a similarly negative coinage will undoubtedly follow his second. The CCP enjoyed his anaemic chest-thumping to indulge in a bit of rabble-rousing. They'll miss him more than the unhappy Japanese electorate.

The fact is that China want's to go to war with Japan, if that was to happen then they would go to war with the U.S. Unfortunately for China the U.S. is also their biggest consumer (and their biggest debt holder) so their economy would tank. I would hope they wouldn't commit economic suicide just for petty revenge on a generation of people that had nothing to do with WWII.

It will help Asian countries if China, S Korea and Japan co-operate in industrial growth in area. Then bad mouthing each other will reduce, hopefully. Already Mitsubishi and other Japanese corporations are in China, Well, there are difference among these countries but at least we look alike - I mean body shapes, hair color, habit of copying other culture. Japan copied from China and Korea. China copied from India. If these three cooperate each other, other Asian countries will reduce their suspicious mind against China and/or Japan.

The entire world copies off eachother

Finally someone said it...Romans copied from Greeks. Europeans in general copied tons of stuff from the East. Stop with this silly stuff about "to copy".

I'm sure most Japanese in power either in business or politics understand this, which is no secret by the way that the only leverage Japan has on selling techs, and furnished precision products to China is price and proximity. Quality can be matched by most EU nations, US, Canada, and even S. Korea nowadays.

China can procure anything Japan can make from EU or even Canada. China might have to spend more and wait longer to get the same products. But so long as those companies in EU and Canada are willing to invest in China, which is what those Germans and Canadians are doing to supplant Japan's investments, then China can hold out on Japan for as long as they wish. Its a lose lose between China and Japan but ultimately, if both sides are piss at each other, a weaker Japan means greater leverage by China. Which is what's happening right now.

Another problem for Japan to simply "shift" investments and sale of goods from China to SE Asia. If you combine the entire SE Asia all together, its doesn't equate to half of China's consumer's market. And Japan is not the only player. China is extremely strong and influential in SE Asia as well as S. Korea. So simply by shifting to SE Asia is not going to cover Japan's losses in China. And the purchasing power in SE Asia is no where near what China can do.

Additionally, once Japan retreats from China, someone else will take Japan's place, mainly S. Korea and maybe even US. The products that Japan were selling in China will cease to exist because if Japan no longer produces domestically in China, Chinese will no longer purchase or the Chinese gov't can construct a policy to cause Japanese production sales cease to exist in China. One way is to suspend or refuse to renew your business license. Or like the article says, refuse to allow you to expand or open new stores or plants.

Just look at Nissan, look at the dwindling dealerships since this fiasco. Look at Mazda which used to be one of the most popular car makers in China. Then look at Angela Merkel's visit to China with Volkswagen's head. Guess what happened there. More licensing, plant production, from Germany. Same with Siemens.

Japan shifts away, Germany immediately moves in. Japan shifts some more, someone else will immediately move in.

The only loser is Japan here. There is always a buyer and seller that wants China. But you can't really say the same about Japan because Japan is mostly a seller of furnished goods and tech instead of a buyer. And Japan is completely dependent on others to import raw materials to sustain its own production. Which makes Japan's economic extremely dependent and vulnerable to international politics and regional influences.

One example. If China labels Japan as a hostile or enemy state which will circumvent WTO agreements which China can stops selling the simplest things like vegetables and fruits or rare earth metals to Japan, there will be an immediate chaos much like the toilet paper and oil panic in 73. Its really that easy to affect Japan. That's how vulnerable Japan really is.

So all this huffing and puffing is superficial at best. There is no question Japan needs China in the most desperate way. Can't say the reciprocal is the same. Which is why Abe desperate wants to get back in China's warmth. He knows the pressure that's cooking behind. Even his staunchest neo-nationalist backers need to make bank.

It amazes me that most posters see China and Japan as countries following the same economic pattern but fail to make a note of the one most important difference between the two. The rule of law as opposed to the rule of man. For those who have no idea of what that means; look it up. For those who do; you should be aware of the enormous gulf between these two principles and the ramifications of that difference. That should always figure in your appeasement attitude towards the monolith of China

highball7

So many wrong in so many plaes don't know where to start.

China can procure anything Japan can make from EU or even Canada. China might have to spend more and wait longer to get the same products.

Yes but will hike the price of product losing competitve edge over items made in SE Asia utilitzing Japanese conponents. PRC relies on export so losing competitive edge automatically means demise of nation.

SE Asia all together, its doesn't equate to half of China's consumer's market. And Japan is not the only player. China is extremely strong and influential in SE Asia as well as S. Korea. So simply by shifting to SE Asia is not going to cover Japan's losses in China. And the purchasing power in SE Asia is no where near what China can do.

Nope PRC population that can AFFORD buying Japanese products is 1/10~1/5 the population so it is at par with total population of SE Asia. The Gini index for PRC is close to 0.5 so a larger portion of PRC population is at proverty level.

Additionally, once Japan retreats from China, someone else will take Japan's place, mainly S. Korea and maybe even US. The products that Japan were selling in China will cease to exist because if Japan no longer produces domestically in China, Chinese will no longer purchase or the Chinese gov't can construct a policy to cause Japanese production sales cease to exist in China. One way is to suspend or refuse to renew your business license.

This kind of action always backs fire and most nation becomes hesitant to go in thinking they maybe next. This kind of action hikes up risk index by nation for investment. PRC is already high up with the list with all the laws that makes it very difficult to pull out and/or return profit to their home nation.

One example. If China labels Japan as a hostile or enemy state which will circumvent WTO agreements which China can stops selling the simplest things like vegetables and fruits or rare earth metals to Japan, there will be an immediate chaos much like the toilet paper and oil panic in 73. Its really that easy to affect Japan. That's how vulnerable Japan really is

Short answer PRC can't, not now anyways since PRC needs to prove to WTO that Japan is hostile towards PRC and had suffered heavy casulities in a battle recently. PRC also goes against the peace treaty signed in the 70's with Japan.

Basically the same doomsayer's PRC propaganda that is worth less then the bandwidth required to post .

SamuraiBlue,

So many wrong in so many "places". Don't know where to start. A bit ironic isn't it. Why don't we let data speaks for itself.

PRC reliance on export is less than 26% of its entire GDP (reference data worldbank.org). Meaning more than 74% of the GDP is produced domestically in China.

SE Asia cannot afford most Japanese components unless they are built locally. Problem is they don't have the proper infrastructure to even keep the lights on. Where is the power source and water supply coming from all the new plants? Who do you think are the ones building those power plants and pipelines. Let me give you a hint. Starts with a C. In Philippines alone, 50% of its ENTIRE NATION's power sources are controlled by the Chinese. In Vietnam, guess who controls the Mekong River and downstreams to the Mekong Delta? Ding Ding Ding, starts with a C again.

That's called strategic investments if you're unfamiliar with the term.

Blah blah blah? Risk Index? Did you invent this? Short Answer? What the hell are you talking about? The PRC has already suspended exports of rare earth metals to Japan last year, the year before. If it wasn't the US that intervened and sat Japan and China down like little children, Japan would still be waiting for those materials.

China can start a economic war against Japan anytime it wants. There is nothing Japan has that China can't get from anyone else. Unless Japan all of the sudden learned how to create oil, gas, metals, and foodstuff out of thin air of that island of yours, China, nor anyone else on earth don't need Japan's export to go on another day. That's a fact. Japan can be made irrelevant if China really wants to push it.

China isn't the one asking Japan to stop investing or selling. Japan is the one that is thinking about shifting with all these propaganda. Name one company that has stop dealing or selling to China? Just because Japan is slowing down on investing in China NOW, doesn't mean anything substantial. Japan has been investing in China for over 30 years continuously. There are only so much you can invest. And with increasing hostility between the 2 nations, there is no doubt China will hit back at Japan.

HERE ARE SOME ACTUAL POLLS. Taken by Global Times, Nikkei, Maeil Business News, over 60% of Chinese businesses and CEOs refuse to do business with Japan due to increasing political hostility. (Ref. Voice of America Jan 8th 2014). That is why Japan has to shift. Its not because you want to shift, its because you HAVE to shift since the Chinese don't want to do business with you. Guess what, neither do the S. Koreans.

Do you know what will happen when Japan has to compete with both China and S. Korea in SE Asia at the same time? Not withholding EU, US, India and Austria's interest in the region as well? You think Japanese products can outpace all these competitions? What a joke. S. Korea is killing Japan in Vietnam. Thailand is basically China's most trusted ally, they are so close that they barter between goods instead of cash. And Thailand is one of few nations that uses Yuan to trade. Philippines is and always will be pro US. But in these recent years, its all about the Koreans. Just because Japanese built a few shopping centers and those outdated electronic plants around doesn't mean much these days. The Koreans are the ones dominating in the electronics sector.

Indonesia is calling China its mentor and best friend. Plus, the Aussie and Dutch has Indonesia locked in for decades. Japan has no play there.

What else you got? SamuraiBlue? You do know that the Samurais are extincted because they are outdated. This ain't the 70s or the 80s. Japan ain't it nowadays. Those top 100 companies in the world where Japan used to be significant? How many of those left? I counted 5 at the most. When I was heading my depart in Japan years ago, there were 13.

If that doesn't catch you guys attention, then keep on dreaming.

Guys who can't understand the ebbs and flows of the shifting of both hard and soft power in this day and age shouldn't be posting anywhere. Forget the bandwidth, you guys are wasting time and life. Always think before you opine.

This is what happened when Japan too economically dependent on China and Korea. Diversify is the key for future survival and Japan must willing to give up it short term gains in order to achieve a sustainable long term gains. Not to say to give up China and Korea, but you must be able to hedge yourself when thing goes unexpectedly wrong.

MyJT2014,

Nowadays, who isn't too dependent on China. S. Korea is not there yet. Look at our economy, switch on the news and its China this China that. Every single day. Think 20 years ago, the only news about China is humanitarian issues, Taiwan or ping pong. In the Asian economic crisis, if it wasn't for China's engine running, Japan would've had a depression. It had all the writing on the wall. Ask anyone in the biz, China saved Japan in that era when it kept Japan's inflation down so that people kept on buying.

Trades between Japan and US ran at $290 billion. So that's significant and Japanese brands are well received in US. But other than car brands, most of the electronics and computer brands has been overtaken by the Koreans. Same thing with white appliances, mostly US and Korean brands.

Japan is diversifying on the backend, especially in robotics and bio-mimetics. However, those are long term R&D that are being dominated by US and the Germans at this moment. Fuel cell is a German specialty. Hydrogen is shaky and might not be well received. With the advent of shale gas and new tech to extract them cheaply, fuel dependency might not be as dire as what we foresee. That can directly affect the mass production of these very expensive R&D Japan has invested over the years.

Plus, Elon Musk is killing just about every Japanese inventions on batteries and engines. So are the Koreans and Chinese. BYD and Samsung's batteries are pretty damn good as well. If Warren Buffet said so, it must be true. Tesla is going to dominate in the near future. Once it creates a econ size car, its all over for the Prius.

The future is not bright for Japan. The only profitable industry is service industry due to the rapid aging population in Japan. Those robotic tech might come to good use as well as healthcare and pharmaceuticals. The days of Japan copying something WE innovated and then improving on them are over. China is doing the copycat and S. Korea is doing the improving. The Germans are a step ahead on precision and quality. Japan is stuck in the middle ground hedging on the good wills from US and its possible reconciliation with China.

Honestly, since I am vastly experienced in both Japan and China's financial and capital sectors, China is Japan's only hope. Pride won't get you anywhere. Reality will sink in if not within 3 years, then 5 years. You should be scared when you pissed off the Chinese so much to the point that they all just say screw it. Forget you. What then? You honestly think that's not a foreseeable future? That if relations don't improve that you can't see the deterioration continue to the point of no return?

I'm sure many Chinese still want Japan's business and friendship since you guys are asians. But there is just so much hate between the two of you. Its deep rooted hatred not yet to the level of the Israelis and the Palestinians. But close to between the Turks and Armenians. Let go of your pride. This is not Japan's century. Learn when to take a step back in order to hedge and get ahead.

I don't mind paying 2 or 3 times more for made-in-Japan. And Japan's minimum wage is low. I think J companies should come back to Japan.

"There's never going to be a good market with china. Chinese copy everythin without any remorse. Just like south Korea."

Toshiko is right; the japanese dont outright copy, but the openly steal ideas then modify them. its a clever stratedgy but very annoying

'I don't mind paying 2 or 3 times more for made-in-Japan. And Japan's minimum wage is low. I think J companies should come back to Japan.'

Japan's child poverty rate is on the rise as well as a growing gap between rich and poor. I don't think Abe wouldn't consign the less well-off to an even worse place than they are now.

Tinawatanabe,

You don't mind paying 2 or 3 times more for made-in-Japan. I wouldn't either.

But just because you and I don't mind, the majority of the working class and middle class of Japanese would mind. These companies cannot compete just for the domestic market in Japan. They have to compete against others. If not for the reason for expansion, simply for the reason for purchasing the raw materials to make these products would be a problem when pricing for commodities has gone up year after year. IF it takes more for you to create while taking back less profits, well, you see the picture.

How can Japan compete with its domestic wages is higher than even US wages?

Like I said, stop dreaming. Those good old days are over. And Abe and his cronies had back Japan into a corner by killing off the world's second biggest consumers market. Think about all those people buying German, Korean and US cars and electronic products instead of Japanese. Those nations' companies will only grow stronger while Japanese companies weaken by default. If you can't see the outcome of this, I don't know what to say.

Ever wordered why Japanese companies have pleaded with the Abe, coz they know wat is at stake if the chinese market . so some times u have to let go of ur arrongance and do wats best for ur people.

Abrahams Japanese people are not arrogant people, actually very humble.

highball7 Japanese people don't mind living poor. They're not particularly wanting to live in a big house. not wanting so much, just a simple life.

'Japanese people don't mind living poor. They're not particularly wanting to live in a big house. not wanting so much, just a simple life.'

Interesting that LV, Gucci and the like see Japan as one of their biggest markets. China has only recently overtaken Japan as the biggest consumer of LV goods. The days of being satisfied with a hinomaru bento may come back but not through choice.

Life with Hinomaru bentoes without needing to deal with China and SK would be a paradise.

Abe and Japan Inc must realize that times have changed. China does not need Japanese investments nowadays. So many countries want to invest in China. Of course investments from Japan are still welcome. The difference is Japanese investments play a much smaller role now. China is investing more in Japan rather than vice versa. The regretful thing is Japanese products are pretty superior but the Chinese population have little appetite for Japanese products at the moment and there are alternatives from the US and EU! Japanese cars are sold so cheaply in China now but the roads are filled with VWs, BMWs, Audis, Hyundais, Mercs, etc. except Japanese cars. This is not to Japan's interest. Debates and denials can go on, but the Phillips, Samsung, Zara, H&M, Gap, etc. are laughing all the way home. If this is the strategy of Abe and his government, they are succeeding beautifully!

The Japaneese are still in the top of the food chain, one of the most develped countries in the World. How will Japan stay stay there? This is the cross roads. The old Colonial World from 1500 Century where the western Powers ruled the World oceans is slowly dying out, China and Rome was the ancient Powers of the old World. If Japan chooses to challenge China there will be great cost Booth for Japan and China but i guess that Chinas global influence will be bigger than Japans.If Japan choses to rely on USA for its security and longterm stability there will be a great danger if the so called western World is declining. If Japan takes a Moore neutral and pacifistic position the countrie will never be isolated in the Asia and the rest of the World. I know that Japaneese are a very competent people but somtimes they are to impulsive and they dont see the real danger.

The days of Japan copying something WE innovated and then improving on them are over. China is doing the copycat and S. Korea is doing the improving.

But I don't remember Japanese firms stuck with nearly as much IP infringement notices. Then again, that's just my memory :P

Honestly, since I am vastly experienced in both Japan and China's financial and capital sectors..

Honestly, I have no presentable evidence to back up any claims that I make about my own personal experience on JT. But I find your omissions on China's lack of reliable quality management philosophy and rising wages in unskilled labour surprising for an experience financial analyst.

Still many people in international community question what China is actually trying to do. Not too many people understand the Chinese culture, values and institutions of China. U.S. is very clear with their objectives. U.S. policies are for democracy and values of human rights that attracts many countries. Most people do not know what is China's core values, and the character of China's soft power cannot be identified. China actually has no soft power because the values comparable to western democracy or human rights are absent in China. China's government has promoted the "harmonious society" but this has been taken as a joke by many of its own people who clearly understand the real purpose of the slogan.

NeoJamal,

That's what Japanese companies are smart. They don't simply copy, they improve at least 20% on the product (benchmark for avoiding IP Infringement issues).

If you click my handle and read my previous posts, I've already mentioned about China's rising wages on both skilled and unskilled labor. Even did an up-to-date salary comparison against Vietnam, the Philippines and India. But China is not the one under scrutiny on this particular article, Japan is.

The so-called lack of reliable quality management philosophy or rather managerial skills in both service and financial sectors has always been a problem in China. Not just in China but the entire Asia. Japan has the same problem. If not, I wouldn't be assigned to trim the fat in Japan and make it lean and mean. Did the same thing in China and its definitely a persistent problem. So their resolution is hire Americans. You won't believe the type of offers I got from Chinese firms. Since I didn't like breathing all that toxic air, I didn't want to stay in Beijing. That's China' achilles heels. But at the very least, they are open to foreign management unlike Japan. With the type of global operations Japanese companies have, the amount of non-Japanese being on the executive levels and board of directors or managing directors are slim and none. IF there was such a balance, just look at the Olympus fiasco.

Not all Chinese people are laborers. I heard from some US people that in Tokyo, at Oberin University,all sort of stufenrts are studying in Chinese, English and Japanese for any subjects up to PhD. The university produces reliable quality management candidate very well. So, some day, these three countries will have talents pooling, then contribute to economic growth of Asia, I'd bet. Then Japan Inc will not have to worry.

Over 200 anti-Japanese films being made per year! What chance has any pro-Japanese sentiment in China got?

Still, you'd think Abe could at least try. Maybe the Chinese govt would put a stop to that if he made a sincere effort, re apologies, and not visiting the shrine.

Is it that, not especially the virulently nationalist Japanese, but tending-to-nationalist Japanese are concentrated in the upper echelons of society? Where the funds for election are more freely available? (Not a rhetorical question, I haven't been to Japan much.)

My sense re the average Chinese is that for a while, they were warming with the Japanese, but recently the younger ones are starting to hate Japan again. Maybe due to the films, maybe to the protests that heat up every so often. But again, as long as Japanese govt keeps bringing out the tinder box, don't see that declining anytime soon. Even if it plays into Chinese govt's hands, the answer should be to stop playing their game. So why doesn't Abe stop?

http://www.reuters.com/article/2013/05/25/us-china-japan-specialreport-idUSBRE94O0CJ20130525

... In January, a tense seminar in Hong Kong brought together opinion makers from both sides, including senior retired military officers. There, the role of wartime drama was singled out as a major factor in plunging ties between the two nations.

"Yes, the Nanjing massacre did happen," Yasuhiro Matsuda, a professor at Tokyo University and a former Japanese defense ministry researcher, told the seminar. "Yes, Japan did invade China. These are facts. But, when there are more than 200 movies coming out, you can imagine the negative effect." ...