Recently, the Japanese car productions have either dropped by a significant amount or production sites were forced to close earlier than expected for the holidays; this reduction of output is a result of the protests, as a wave of anti-Japanese feelings sweep across the nation. The root to these anti-Japanese protests is the escalatingtension of the dispute over the ownership of an island
called Diaoyu in China and Senkaku in Japan. This island, located in the East China Sea between Japan and China, is close to key shipping lanes, rich fishing grounds, and there may be oil reserves in the area. Due to ownership disputes of this island between China, Taiwan and Japan, large-scale protests have been staged in China.
It is interesting how a political event can have its effects on the economy; the dispute lead to drops in the shares of Japanese car companies, with Honda motor dropping almost 5%. As I anticipate and observe the progress of the tension that builds between theses, what seems like estranged countries, I can’t help but wonder what the future economic relationship China and Japan will hold.
For more information about the Diaoyu Island dispute click here
References:
“Toyota and Nissan Scale Back Production in China.” BBC News. BBC, 26 Sept. 2012. Web. 02 Oct. 2012. <http://www.bbc.co.uk/news/business-19725269>.
“Senkaku Islands Dispute.” Wikipedia. Wikimedia Foundation, 10 Jan. 2012. Web. 02 Oct. 2012. <http://en.wikipedia.org/wiki/Senkaku_Islands_dispute>.