Senkaku as Japanese say or Diaoyu islands as Chinese mention have
caused friction between two strong countries. China is upset over Japan
as it is venturing into these oil rich disputed islands.
China retaliated in many ways, but a recent one seem to have
backfired China itself. China started boycotting Japanese cars including
Toyota, Nissan, Mazda, Honda and Mitsubishi. The sales dropped by almost 35 to
50 percent in the month of September. But hard hits are the engineering firms
and car dealerships in China. Most Japanese cars are assembled in factories in
China. And then they are moved to Chinese dealerships. Most of the time dealers
purchase cars from the companies making payments in advance, so when there is a
drop in sales it is the dealers who get the pinch.
China is Japan's largest trading partner. Almost 20% of Japan's
exports are to mainland China and to U.S it is just 15% approximately. So if
this scenario continues it will be a huge setback to both the economies.
Source: CNN Money
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