Tuesday, September 18, 2012

China-Japan Island Dispute Grows in ‘Blow’ for Global Economy

Demonstrators walk near paramilitary police officers in front of the Japanese consulate in Shanghai on Sept. 16, 2012. Photographer: Eugene Hoshiko/AP

China-Japan Island Dispute Grows in ‘Blow’ for Global Economy
By Bloomberg News on September 16, 2012 Tweet Facebook LinkedIn Google Plus 11 Comments
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A territorial dispute between China and Japan worsened as Prime Minister Yoshihiko Noda said he’ll demand the Chinese government ensure the safety of Japanese citizens, thousands protested in Chinese cities and Toyota Motor Corp. (7203) and Panasonic Corp. (6752) reported damage to their operations.

Demonstrators took to the streets in a dozen cities across China including Beijing, Shanghai and Guangzhou, calling for Chinese sovereignty over disputed islands and the boycott of Japanese goods. In the city of Shenzhen, police used tear gas and water cannons to stop protesters from reaching a Japanese department store, Radio Television Hong Kong reported.

“I intend to strongly demand that the Chinese government ensure security” of Japanese citizens, Noda said yesterday on public broadcaster NHK’s “Sunday Debate” program.

Tensions between Asia’s largest economies escalated after Noda’s government said last week it would purchase disputed islands from their private Japanese owner, prompting China to dispatch government vessels near the islands known as Senkaku in Japanese and Diaoyu in Chinese. The row comes as both countries grapple with a global economic slowdown and China prepares for once-a-decade leadership change.

“This is another blow for the global economy,” said Andy Xie, formerly Morgan Stanley’s chief Asia economist. “The costs for China may be less FDI but it could be worse for Japan as the bright spot for the economy has been the auto industry.”

Car Sales
Tokyo Governor Shintaro Ishihara triggered the dispute in April when he said he may use public funds to buy the islands. Tensions escalated after Japan’s cabinet approved the purchase of the islands for 2.05 billion yen ($26 million) on Sept. 11. China has said it doesn’t accept the move.

Sales of Japanese-branded passenger cars fell last month in China, compared with gains of more than 10 percent for German, American and South Korean vehicles. China is the world’s largest car market.

A Toyota dealership was damaged by fire in the Chinese city of Qingdao and the company is checking for losses in other locations, spokesman Keisuke Kirimoto said yesterday. Smoke and flames were also reported coming from a Panasonic electronics parts plant in the same city after demonstrations, Tokyo-based spokesman Atsushi Hinoki said.

Shanghai Protests
In Shanghai yesterday, hundreds of riot police watched over groups of protesters as they gathered outside the Japanese consulate chanting, “down with Japan devils, boycott Japanese goods, give back Diaoyu.” There were no reports of injuries in the largely peaceful demonstrations.

Hundreds of protesters in Beijing threw plastic bottles and eggs at the Japanese embassy a day earlier as riot police stood guard at the gates. In Guangzhou, more than 10,000 people marched in protest, the official Xinhua News Agency reported yesterday. Demonstrations also occurred in the cities of Harbin, Nanjing, Hohhot, Changchun and Wuhan, and overseas in Houston and Chicago, Xinhua reported.

Japan’s Kyodo News said Sept. 15 that more than 40,000 people joined the demonstrations in 20 Chinese cities.

“Japan is becoming more and more arrogant and the feelings of Chinese are increasingly being oppressed,” said Xiao Feng, 26, an office worker protesting at the Japanese consulate in Shanghai yesterday after traveling to the city from Jiangxi province. “We need to step up and make our feelings known that they can’t just have their way.”

Island Landing
Activists from Hong Kong plan to sail to the islands on Sept. 18, China National Radio reported on its website. Japan last month arrested and deported a group that departed from Hong Kong and landed on the islets to assert China’s claim.

September 18 is the anniversary of the Mukden Incident, also known as the Manchurian Incident, which took place in 1931 near what is now the Chinese city of Shenyang and led to the Japanese invasion of the northeastern portions of China.

In Japan, the Foreign Ministry announced that Shinichi Nishimiya, the incoming Japanese envoy to China, died yesterday morning after an illness. Nishimiya was sent to the hospital for an unspecified illness two days after his appointment, the ministry said earlier on Sept. 13.

On Sept. 15, Japanese Foreign Minister Koichiro Gemba and Defense Minister Satoshi Morimoto cut short a visit to Australia because of the protests in China, NHK reported.

To contact Bloomberg News staff for this story: Chua Kong Ho in Shanghai at; Mariko Yasu in Tokyo at; Yuki Hagiwara in Tokyo at

To contact the editor responsible for this story: Paul Tighe at

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Reader Discussion Showing 11 Comment now
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XIAO JIN YUAN, 09/16/2012 07:19 PM
Who have been the real aggressors in the world and Asia in particular? The British and the Japanese. China had been the victim of brutal aggressions by Western countries and Japan for almost 100 years before 1949. The Japanese started aggression against my poor motherland in 1931 and occupied most part of China for 8 years including my hometown Nanking where the Japnese occupying force massacred 350,000.00 innocent civilians. The streets of my hometown was drenched in the blood of Nanking residents killed like small games by the barbaric Japanese soldiers. Please do not forget how brutally Japanese soldiers bayonetted American POWs.
My family owned several residential buildings consisting of over 100 rooms in the center of Nanking. The Japanese occupiers, some of them Japanese civilians, seized all of our properties and used them for 8 years with any compensations. Please tell me who has been the real aggressor.

Diaoyu Island has been our ancester land that the Japanese took by force. We 1.4 billion Chinese, do not want an inch of other people's land nor will ever give up our claim to every tiny piece of ancestor's land.

12 people liked this. Like Reply
kevchew, 09/16/2012 09:06 PM
China has been victim of Chinese own aggression more than by any other countries. The corruption, the suppression from freedom of speech, fear, etc. not to mention the poisonous food and toys. Yes, patriotism is necessary. But where is patriotism when it comes to profit? BTW, would you say the QING dynasty is an oppression by Chinese own ethnic?

3 people liked this. Like
austin hartz, Yesterday 05:24 PM
Diaoyu Island has been our ancester land that the Japanese took by force. We 1.4 billion Chinese, do not want an inch of other people's land nor will ever give up our claim to every tiny piece of ancestor's land.

Right, tell that to the Dalai Lama.

antichinaprous, 09/16/2012 05:27 PM
everyone in the world knows who the aggressors are in asia - it's china, who is involved in disputes with japan, the philippines, vietnam and other south east asian countries.

10 people liked this. Like Reply
Dennis Huang, 09/16/2012 09:16 PM
Being involved in disputes with many countries does not make China the aggressor. In your case, why haven't you questioned the fact that the countries involved in disputes with China are aggressors ?

China is the victim in this case. What has China done ? It is only trying to protect the land they own and deserved (upon ancestral efforts).

Your comment can be considered ludicrous and fraudulent. Please do initiate some research before commenting again next time.

6 people liked this. Like
K Enriquez, Yesterday 02:52 AM
China has territorial disputes with 20+ countries. Who's really the aggressor here?

2 people liked this. Like Reply
Verlito, 09/16/2012 11:09 PM
The on-going territorial rows between China and Japan must be settled peacefully in accordance to the current UN laws. Both the two countries must submit to UN mandate. While the case will be heard at the UN and pending final resolutions of the case, the disputed territories must be under the administration of the UN to protect its environment and ensure freedom of navigation.

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Jeff, 09/16/2012 07:20 PM
How many people truly know the history of the dispute? Here is the best reserach paper by a university of New Zealand, backed up with international law. If you follow the story, you should read it:

1 person liked this. Like Reply
Ianso23, 09/16/2012 10:50 PM
I would like to see China and Japan settle this dispute in a peaceful way. Perhaps they could agree that the first of the two to land a woman on the Moon and return her safely to Earth would win undisputed control over the Islands.

Like Reply
Ignatius Ibsage, 09/16/2012 05:05 PM
so where's hillary? wasn't she in china during the demo convention? couldn't she anticipate this? what is barry's position? aren't we moving a carrier task force or two to the area? who's running the country? what's going on?

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GoldBell, 09/16/2012 04:03 PM

(mochi thinking)
i guess that reuters or Bloomberg want to cover the fact to be peaceful demonstrations, but they are just riots or terrorism.....
why western media intends that the acting by Iranian or Iraq people is all of under the terrorism, but the anti-japan movements in white China are peaceful civilian demonstrations.  

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