This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Tiny Pacific Islets Sinking Giant Japanese Businesses in China

Yet when anti-Japan demonstrations erupted across China in 2005 over an accumulation of post-war political disputes, former Chinese commerce minister Bo Xilai warned the boycott would jeopardize China's economic development as joint ventures are rampant and Japanese firms employ some 1.5 million locals.

Chinese authorities squelched the protests that year in part to avoid damaging economic ties. But Bo Xilai has been ex-communicated. Is anyone listening now?

The Japan External Trade Organization office in Beijing is still tallying up business losses from this month's demonstrations and boycotts. It's busy phoning up some of the 4,619 Japanese subsidiaries in mainland China and estimating a toll from cancelled travel plans.

JETRO doesn't expect to report dramatic losses yet but warns of a lag effect that's obvious in six to 12 months even if anti-Japan activity dies down before then. "Direct losses are hard to estimate but may not be too huge for now, yet from today forward we might see something different," JETRO specialist She Xing told me this week. In 2005, he adds, "the government handled protests in a rational manner."

At least 19 massive Japanese firms are listed in New York, putting their shares at risk if their properties, workforces or sales take a sustained hit.

Violent mid-September protests in various Chinese cities prompted temporary closure of many Japanese businesses in China, Capital Economics says. It names Panasonic (PC) and global camera maker Canon (CAJ - Get Report) plus three signature automakers, Toyota Motor (TM - Get Report), Honda (HMC - Get Report) and Nissan (NSANY).

These firms are on the move in China. Toyota hopes to double sagging China sales by 2015 with sales of hybrids and cheaper cars, a Japanese business paper, Nikkei said earlier this month. Chinese local governments are keen on putting drivers into hybrids as pollution stifles the air.

Panasonic is aiming for sales growth in China from 8.5 billion yen in fiscal 2011 to 25 billion yen in fiscal 2015 with what it describes as a full-scale entry into the "Chinese housing equipment and construction market" this year.

Shares for these automakers and electronics firms have fallen 3% to more than 9% since Sept. 14, the day before mass demonstrations swept China.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CAJ $27.92 0.43%
HMC $27.42 3.60%
TM $101.88 1.30%
NSANY $17.72 0.53%
AAPL $93.18 -1.10%


Chart of I:DJI
DOW 17,641.02 -19.69 -0.11%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs