This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

China's 'Line in the Air' Won't Stop Japanese Business

Stocks in this article: PCRFY CAJ TM HMC NSANY

TAIPEI (TheStreet) -- China's offshore air defense zone covering islets disputed by Japan hardly eases historic turbulence between the two economic giants that depend on each other for business. But the zone announced by China in late November won't bring down Japanese business as it did last year and in 2005 following other political disputes.

China says Japan, like anyone else, should notify it before flying through its air identification defense zone, or ADIZ, that covers the Diaoyu (Japan calls them Senkaku) islands claimed by both countries. Japan has flown anyway without a heads-up to Beijing, as has the United States. China didn't send as much as a mosquito to chase the planes off.

I suspect the air defense zone was sent up as a trial balloon, a common yet widely misunderstood tool of Beijing policy making. Consequences of violating its zone were never spelled out, nor were some of the basic rules -- for example, what happens to civilian aircraft that use the space. Keeping things vague lets China do anything from attack to sit quiet and say it has followed policy as it uses the experiment to gauge world opinion, which has gone against it.

China probably won't cancel its zone, but it's unlikely to kick others out or even bluster on as if it might. Worst-case scenario, Chinese planes will use the zone to track Japanese or American counterparts up close. Provocative, perhaps, but not a precursor to war.

As the trial balloon is losing altitude, the authoritarian government has few grounds to create an anti-Japan furor at home through the state-run mass media. Its official Xinhua News Agency quotes the foreign ministry on Nov. 27 as saying the air zone is for defensive only, causing no need for panic among other countries.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,686.25 +329.38 1.90%
S&P 500 2,050.44 +37.55 1.87%
NASDAQ 4,730.3260 +86.0140 1.85%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs