Dispute between Japan and China could have large effect on global economy

A dispute between Chinese and Japanese officials over several tiny Islands roughly 370 kilometers off the coast of China has sparked outrage throughout China. The Chinese feel that these islands belong to them and that it was unfair that the Japanese purchased them without negotiation. Consequently many of the Chinese have begun to riot. This dispute is potentially dangerous, economically speaking, for both countries. In recent years, China has developed into Japan’s biggest trading partner along with hosting many Japanese manufacturing factories. Companies such as Panasonic and Toyota have had factories and dealerships set on fire. Honda and Toyota have also shut down plants in China recently due to fear of this happening again. If the tension escalates Japan must find other ways to aid their economy.

 

A small conflict like this one could affect much more than just these two countries. The argument between these two countries could easily have an effect on the global economy. If Japanese companies such as Toyota and Honda are unable to produce cars in China you can expect for a price hike in Japanese products especially automobiles and electronics. If Japanese car prices rise consumers could be looking for alternate companies to purchase from, such as North American brands Ford or GM. An argument over something as small as a few islands in the middle of nowhere can go a long way in effecting the world’s economy.

http://www.economist.com/node/21563316

http://www.economist.com/blogs/analects/2012/09/anti-japan-protests?spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709

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4 Responses to Dispute between Japan and China could have large effect on global economy

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  3. Piter Freide says:

    Reading this text, I was struck by how unpredictable international conflicts can be and how quickly political tensions can turn into economic chaos. It is particularly surprising that a dispute over a few small islands could lead to the closure of factories belonging to giants such as Panasonic, Toyota, and Honda, which would have a significant impact on the lives of ordinary people. After reading such materials, I involuntarily began to think about the stability of my own life and business. Incidentally, while reading this, I stumbled upon a moving service in Canada — https://soundsgoodmoving.com/ — and realized how important it is in today’s world to have reliable services, especially when situations change quickly and unpredictably.

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