Japanese carmakers fear China backlash over Abe’s shrine visit

Article by Anita Panait, on January 3, 2014

Japanese carmakers are readying themselves for a possible consumer backlash in China after Prime Minister Shinzo Abe visited the Yasukuni Shrine, which memorializes war dead during the birthday of Mao Zedong. Nissan Motor Co. said it was "closely monitoring" developments in Japan-China relations after Abe's visit.

China has condemned Abe’s visit at that shrine, which honors the war dead including 14 World War II leaders who were convicted as Class A war criminals. The visit also coincided with the 120th birthday of Mao, who is considered as the founder of the communist nation.

"As a company we have no means to intervene in politics," Huo Jing, a spokeswoman for Nissan in Beijing, told Bloomberg, adding that all they can do is to be better at their job.

Toyota Motor Corp. and Honda Motor Co. posted declines in sales in 2012, following a breakout of a territorial dispute between Japan and China. "We're still at a stage where we need to carefully monitor the impact, but it's obvious that this only has a negative impact on Japan," Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co., told Bloomberg.

He remarked that the visit poses some geopolitical risks. Cui Dongshu, deputy secretary-general of the Passenger Car Association in Shanghai, said that the timing of the visit to the Yasukuni Shrine sends a very dangerous signal as it will deter buyers who worry about the safety of their vehicles and themselves.

In 2012, Japanese companies suffered a deep backlash in sales in China, as Chinese consumers boycotted Japan-branded products following a territorial dispute escalated between the two countries. This was sparked by Japan’s move to purchase two East China Sea islands -- known as the Diaoyu in Chinese and Senkaku in Japanese -- from their private owner. Both countries are claiming that the islands belong to their territory.

The Senkaku Islands are a group of uninhabited islands located in the East China Sea, as controlled by Japan but claimed by China. These islands are located roughly due east of Mainland China, northeast of Taiwan, west of Okinawa Island. On April 2012, Tokyo's prefectural governor Shintaro Ishihara publicly announced that it would allow Tokyo Municipality purchase the islands from its private owner.

Japanese Prime Minister Yoshihiko Noda expressed his consideration for the Japanese government to buy the disputed islands. This sparked massive anti-Japanese demonstrations in China, with a call to boycott Japanese products.

As a result,Honda temporarily closed all of its major assembly plants in the country while Nissan temporarily shut down two of its three sites in the country. Toyota had its local subsidiaries decide on temporary closures based on local conditions. Mazda likewise suspended production at its Nanjing site for four days. Sony and Canon temporarily shut down some of their factories in China. Protest attacks also damaged Panasonic’s two plants in the country.

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Topics: china

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