Island dispute hurting Japanese companies in China

Japan`s nationalization of the disputed Senkaku islands (called Diaoyu by the Chinese) is fueling anti-Japan protests in China, and the effects have spread to Japanese companies operating in the world`s most populous country.

Japanese companies have temporarily suspended plant operations and sales in fear of potential massive protests Tuesday, which will mark the anniversary of Japan’s 1931 occupation of parts of mainland China. Japanese schools in Beijing will be closed Monday and Tuesday.

On Sept. 18, 1931, Japanese militarists openly started their war of aggression against China under the excuse that China`s Northeast Force had blown up the Liutiaohu section of the South Manchuria Railway.

According to Japanese media Monday, retail company Aeon suspended operations at its store in Qingdao, Shandong Province, after protesters vandalized the place, with no date as to when sales will resume. Chinese protesters stole or broke half of the products in the store estimated at 2.4 billion yen (30.6 million U.S. dollars) in value.

Another retail company, Seven & I Holdings, also temporarily closed five stores in Chengdu, Sichuan Province. Department store group Isetan Mitsukoshi Holdings also suspended operations at its store in Chengdu.

Camera maker Canon decided to close three plants in Jiangsu and Guangdong provinces until Tuesday. Panasonic shut down its electronics parts plant in Qingdao and Suzhou after production lines were damaged after protesters set the place on fire Saturday.

Other Japanese companies hid their signboards for fear of protestor attacks and looting. Tokyo-Mitsubishi UFJ bank covered the signboard of its Beijing branch with a white cloth. Convenience store giant 7-11 removed all of its products made in Japan from its Beijing branches.

Japanese Prime Minister Yoshihiko Noda on Sunday ordered all efforts to protect Japanese nationals in China at his office.

Voices in Japan are also raising skepticism over China despite its population of 1.3 billion, vast consumer market and low-cost production base. With rising investment risks, however, many Japanese say production and investment bases should be relocated to Southeast Asia.

lovesong@donga.com