Joey Tung's Blog

Ever since discussions between China and Japan over the Senkaku Islands (or Diaoyu Islands) arose, tensions between the two countries have been tense. With both sides standing firm and claiming the islands as theirs, a resolution is far from near.

To show their support, citizens of China have launched an economic boycott on Japanese products. The most notable example thus far is China’s boycott of Japanese auto companies. It would make sense that by not purchasing any Japanese products, this boycott has to be useful.

But is it really?

It is shown that Toyota’s sales have fallen 40% year-on-year in September and Mazda and Nissan have been following the same pattern. However, profits for other auto companies such as General Motors have experienced increased sales in China.

Looking at these reports, it would seem that an economic boycott is an effective way to show China’s attitude towards Japan.

Also, based on a 2011 study, the higher the status of the company, the more effective a boycott seems to be. So targeting large auto companies like Toyota seems to have been a smart decision for China.

Sources:

• http://business.blogs.cnn.com/2012/10/09/do-economic-boycotts-work/

Photo:

• Flickr