There are fears over the eco­nom­ic im­pact of the dis­pute be­tween Chi­na and Japan if the row over is­lands in the East Chi­na Sea is not re­solved soon. Sev­er­al ma­jor Japan­ese com­pa­nies have sus­pend­ed op­er­a­tions in Chi­na af­ter at­tacks on shops and car deal­er­ships. Shares in some of those firms fell in Tokyo on Tues­day. The Japan­ese gov­ern­ment has asked Bei­jing to do more to pro­tect Japan­ese busi­ness­es.

Trade be­tween Chi­na and Japan is worth about US$345 bil­lion. "This is a ma­jor con­cern. The wor­ry is that if it is not dealt with prop­er­ly and fast enough, the sit­u­a­tion may get out of hand," Mar­tin Schulz of Fu­jit­su Re­search In­sti­tute told the BBC. "And any such de­vel­op­ment will hurt Japan­ese firms even fur­ther."

Japan's Chief Cab­i­net Sec­re­tary Os­amu Fu­jimu­ra said Tokyo had asked Bei­jing via diplo­mat­ic chan­nels to take nec­es­sary steps to pro­tect Japan­ese na­tion­als and pre­vent fur­ther dam­age to Japan­ese com­pa­nies in Chi­na. "Japan­ese com­pa­nies play an im­por­tant role in the Chi­nese econ­o­my and em­ploy­ment. We be­lieve we should be calm and make ra­tio­nal judge­ments from a broad per­spec­tive," he told re­porters.

Nis­san Mo­tors shares dropped five per cent in Tokyo, Uniq­lo-own­er Fast Re­tail­ing fell sev­en per cent and Hon­da Mo­tors was down by 2.5 per cent. The protests in Chi­na fol­lowed Japan's pur­chase of is­lands known as Senkaku in Japan and Diaoyu in Chi­na, over which Chi­na claims sov­er­eign­ty.

BBC