Home > Uncategorized > Japan-China Trade Ties Complicate Island Dispute – NYTimes.com

Japan-China Trade Ties Complicate Island Dispute – NYTimes.com

September 22, 2012 Leave a comment Go to comments

“The huge contradiction at the center of Japanese-Chinese relations is the fact that politics and the economics are moving in completely opposite directions,” said Kazuko Mori, a China specialist at Waseda University in Tokyo.

Those economic ties may help explain why the Japanese government has remained so reticent, even as demonstrators in China vandalized Japanese-owned businesses this week. They may also explain why China — after at least tolerating, if not encouraging, protests in recent weeks — has taken steps to end the protests and prosecute rioters.

According to Japan’s Finance Ministry, China was Japan’s largest trading partner last year, and Japan is China’s second-biggest trading partner after the United States. Japan is also China’s largest outside investor, with Japanese companies directly or indirectly employing about 10 million Chinese, according to a Japanese lobby group.

Perhaps as important as the volume of the trade and investment, though, is how complementary the two countries’ industries are.

Japan’s still formidable lead in technology allows it to provide much of the production machinery in Chinese factories and many of the core components in Chinese-made products that have helped make China’s rise possible. Japan’s struggling electronics companies, in turn, have become dependent on sales to China’s lower-cost manufacturers, which use Japanese memory chips, display panels and other parts in many of their high-tech products.

The iPhone is just one example. Although the phones are assembled in China, many of their most sophisticated parts are supplied by Japanese companies like Toshiba and TDK. Japanese content is so high that there were even calls during the recent anti-Japan protests to boycott the iPhone, according to Japanese news reports.

via Japan-China Trade Ties Complicate Island Dispute – NYTimes.com.

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