China protests: Fears rise over Japan

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