Malaysia - Bilateral trade badly affected

Economic cooperation between China and Japan benefits both, but this spat over the islands will definitely affect and damage their normal development which both countries do not want to see.

ALL signs are that the heightening tension between China and Japan over the contentious Diaoyu Islands (or Senkaku to the Japanese) are severely affecting their bilateral trade and investments.

At a press conference in Beijing on Wednesday, Chinese Commerce Ministry spokesman Shen Danyang said China’s trade volume between January and August stood at US$2.49tril (RM7.62tril) which was a 6.2% increase from the correspondent period last year.

Trade with Brazil, the United States, Asean and Russia grew by between 6.3% and 14.9% but trade with Japan dropped 1.4% to US$218.7bil (RM669.3bil).

In terms of Chinese investments abroad, there was a decline of 11.1% in Japan while other powerhouses like the US, Russia and Asean all registered double-digit increases in attracting Chinese money, he said.

“Historically, Diaoyu Islands have always been within the territory of China. The unlawful ‘purchase’ of the islands by Japan severely violated China’s territorial sovereignty and caused the Chinese people’s outrage and strong resistance.

“Economic cooperation between China and Japan benefits both, but this latest drama will definitely affect and damage the normal development of bilateral trade, which we do not want to see. Japan should take full responsibility,” Shen said.

He said the episode would also affect the deliberations of a trilateral free trade agreement between China, Japan and South Korea whose officials were expected to meet in Seoul at the end of this month.

Early this month, the Japanese media reported that the Japanese government had nationalised its control of Minamikojima, Kitakojima and Uotsuri islands by buying them from the Kurihara family for 2.05 billion yen (RM80mil).

Since the news broke in April, Chinese in China and other countries have expressed their anger and resistance towards Japan’s move.

They took to the streets in Beijing, Shanghai, Hangzhou, Shenzhen and other Chinese cities targeting Japanese missions and restaurants.

Several protesters even stopped the car of Japanese Ambassador to China, Uichiro Niwa, in downtown Beijing, on his way back to the embassy, while some others vandalised public and private premises.

Groups of Chinese also launched petitions and signature campaigns calling for their compatriots to boycott Japanese products.

In the US, Malaysia and other countries, overseas Chinese had their voices heard when they protested in front of Japanese embassies and businesses.

According to Chinese news reports, Japanese automobile joint ventures in China such as Dongfeng Honda and Dongfeng Nissan closed their production facilities while outlets with Japanese investments, such as Uniqlo, 7-Eleven and Canon have already reopened.

Dongfeng Honda deputy sales director Li Peng was quoted as saying that the manufacturing plant in Hubei province remained closed.

“We will monitor the situation to see whether to resume production after Wednesday or later,” he said.

Nissan’s plants in Zhengzhou, central Henan province, and Guangzhou in Guangdong province were also closed amid safety concerns.

Li said Dongfeng Honda closed 104 outlets across the country and received a cancellation of 2,120 orders.

Liu Yue, a deputy manager with 7-Eleven’s Beijing office, said all 180 7-Eleven stores in Beijing and Chengdu in Sichuan province have reopened and resumed business.

He said none of the stores were damaged during the protests and on Tuesday which was the 81st anniversary of the Japanese invasion of northeast China.

When asked whether the Chinese government would compensate for the damages incurred by certain Japanese businesses due to the protests, the Commerce Ministry’s spokesman said China was a lawful country where the legitimate rights and interests of the Japanese investors were protected.

“The ministry supports patriotic campaigns that are held within the laws. We believe that most of the Chinese people are calm, rational and lawful in expressing their sentiments. If foreign investors were threatened, they should seek proper help of the public security bureau, the ministry and other relevant departments,” Shen said.

While the Chinese leaders have all condemned the islets buying stance and sent naval troops to the Daioyu Islands, the surrounding areas of the islands remain calm with civilian boatmen keeping their emotions in check.

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