SHANGHAI — Some major Japanese brands announced factory shutdowns in China on Monday and urged their Japanese workers in the country to stay indoors ahead of what could be more angry protests over a territorial dispute between the two biggest economies in Asia.
China's worst outbreak of anti-Japan sentiment in decades led to demonstrations over the weekend and violent attacks on well-known Japanese companies, like the carmakers Toyota and Honda, forcing frightened Japanese into hiding and prompting the Chinese state news media to warn that trade relations could be in jeopardy.
Hong Lei, a Chinese Foreign Ministry spokesman, said the government would protect Japanese companies and citizens and called for protesters to obey the law.
China and Japan, which generated two-way trade of $345 billion last year, are arguing over the uninhabited islets in the East China Sea, a longstanding dispute that erupted last week when the Japanese government decided to buy some of them from a private Japanese owner.
In response, China sent six surveillance ships to the area, which contains potentially large gas reserves. On Monday, a flotilla of 1,000 Chinese fishing boats was sailing for the islands. The islands are called the Senkaku by Japan and Diaoyu by China.
The protests over the weekend mainly targeted Japanese diplomatic missions, but they also occurred at shops, restaurants and car dealerships in at least five cities. Toyota Motor and Honda Motor said arsonists had badly damaged their dealerships in the eastern port city of Qingdao.
Toyota said its factories and offices were operating as normal Monday and that it had not ordered its Japanese employees home.
Honda said it would suspend production in China starting Tuesday for two days. Fast Retailing, largest apparel retailer in Asia, said it had closed 7 of its Uniqlo outlets in China and may close 19 more.
The top Japanese general retailer, Seven & I Holdings, said it would close 13 Ito Yokado supermarkets and 198 of its 7-Eleven convenience stores in China Tuesday. Sony is discouraging nonessential travel to China.
Mazda Motor will halt production at its Nanjing factory, which it jointly operates with Chongqing Changan Automobile and Ford Motor, for four days. Nissan Motor suspended China production for two days, starting Monday.
"I want to leave," said a Nissan executive, who declined to be named, in the southern Chinese city of Guangzhou. "Protests near my home were horrifying over the weekend."
The electronics maker Panasonic said one of its plants had been sabotaged by Chinese workers and would remain closed through Tuesday.
Canon, the camera and copier maker, will stop production at three of its four Chinese factories Tuesday, Japanese news media reports said, while All Nippon Airways reported a rise in cancellations on Japan-bound flights from China.
The dispute also hit the shares of Hong Kong-listed Japanese retailers on Monday, with the department store operator Aeon Stores (Hong Kong) falling to a seven-month low.
"All Japan-related shares are under selling pressure," said Andrew To, a research director from Emperor Capital.
Prime Minister Yoshihiko Noda of Japan, who met visiting U.S. Defense Secretary Leon Panetta on Monday, urged Beijing to ensure Japan's people and property were protected.
Mr. Panetta said the United States would stand by its security treaty obligations to Japan but not take sides in the dispute, and urged calm and restraint on both sides.
The overseas edition of The People's Daily, the main newspaper of the Chinese Communist Party, warned that Beijing could resort to economic retaliation if the dispute festered.
"How could it be that Japan wants another lost decade, and could even be prepared to go back by two decades?" asked a front-page editorial. China "has always been extremely cautious about playing the economic card," it said. "But in struggles concerning territorial sovereignty, if Japan continues its provocations, then China will take up the battle."
By SOMINI SENGUPTA 17 Sep, 2012
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Source: http://www.nytimes.com/2012/09/18/business/global/japanese-companies-close-facilities-in-china-as-tensions-rise.html?partner=rss&emc=rss
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