Where the Sino Japanese Trade Crisis Goes

        With the gradual deterioration of the Diaoyu Island issue, whether the two sides will fight a economic warfare has become the focus of attention. Economic countermeasures can be regarded as a good means to counter Japan.

        Tourism: Japanese Chinese account for 40%

        Speaking of tourism, Japan's tourism industry is basically supported by the Chinese people. In 2011, the Japanese Government Tourism Bureau released the latest statistical data as of February 25, showing that in January, the number of visitors from both sides of China to Japan reached 254000, accounting for 43.7% of all foreign tourists visiting Japan. Among them, there are 110400 mainland tourists and 46600 Hong Kong tourists. Foreigners visiting Japan are mainly Chinese, and this trend will become even stronger in the future.

        Suzuki Keming, director of the Shanghai Office of the National Tourism Administration of Japan, once revealed that Chinese tourists to Japan consume an average of 160000 yen (about 14000 yuan) per person, ranking first among Japan's "important tourism promotion countries.". The average daily consumption of tourists from other countries is 80000 yen, while the consumption of Chinese tourists is twice that of tourists from other countries. In previous years, electrical appliances were the most popular items for Chinese tourists to Japan, while recently, clothing and cosmetics have taken the place.

        According to the China Japan exchange rate ratio at that time, based on the per capita consumption of 160000 yen by Chinese tourists, in January alone, tourists from three places on both sides of China contributed 356 million yuan to Japan's tourism industry, and mainland tourists spent 155 million yuan. Regardless of price levels and other factors, it is 4.27 billion yuan in 12 months of a year. As the "Diaoyu Island" incident continues to ferment, many domestic travel agencies have begun to slow down their travel business to Japan.

        On September 12, 2012, the general manager of China International Travel Service, surnamed Zhang, who is responsible for outbound tourism, said in an interview with reporters that up to now, China International Travel Service (28.00, - 0.22, - 0.78%) has completely suspended business processing for its original travel routes covering the three regions of Tokyo, Hokkaido, and Okinawa. On the same day, several domestic travel agencies such as Kanghui International, Shanghai Travel Service, and Xiamen Chunhui International Travel Service have also suspended or slowed down their travel to Japan.

        [Trade] The proportion of trade volume between China and Japan is 20.6%

        Sino Japanese trade has a considerable impact on Japan's economy. The Nihon Keizai Shimbun reported that according to the statistics released by the Japan Trade Promotion Agency, the trade volume between China and Japan in 2011 reached 344.9 billion dollars, and Japan's imports to China reached 183.4 billion dollars. Japan's exports to China amounted to US $161.4 billion, with China Japan's trade volume accounting for 20.6% of Japan's total trade volume.

        According to statistics, Japan had 2487 non manufacturing enterprises in Chinese Mainland in 2011, accounting for 24.4% of Japan's 10187 overseas non manufacturing enterprises.

        According to a trade report issued by the Japan Trade Promotion Agency, in the first half of this year, Japan's trade deficit with China increased 2.6 times compared to the same period last year, reaching 1.401 trillion yen, and its total exports to China decreased 5.7% year-on-year. The main reason for the expansion of the trade deficit is that exports of steel and machinery products to China have decreased for the first time since 2009.

        Zhao Zhongxiu, Dean of the School of International Trade at the University of International Business and Economics, stated that in the face of severe trade growth in China, a decrease in demand for Japanese products is also expected.

        If the Chinese market for Japanese manufacturing shrinks, it will be a big blow to Japan. There may be two situations in the future: one is that in the short term, Japan's new exports will decline, and dealers with inventory of Japanese goods will clear their warehouses; Another situation is that Japan's manufacturing position has been replaced by countries such as South Korea.

        [Japanese bonds] China is the largest holder of Japanese treasury bond

        China holds a large amount of Japanese treasury bond bonds. According to the Nihon Keizai Shimbun quoted on the website of the Ministry of Commerce of China, the balance of payments statistics released by the Ministry of Finance and the Central Bank of Japan show that the amount of Japanese treasury bond (including short-term treasury bond) held by China is rapidly expanding, reaching the highest level in history of 18 trillion yen by the end of 2011, an increase of 71% over the previous year. China's holdings have grown rapidly since 2009. In 2010, China overtook the United States and Britain to become the largest holder of Japanese treasury bond.

        [Japanese cars] Car sales have plummeted

        The increasingly tense diplomatic relations between China and Japan have cast a shadow over the sales of Japanese cars in China. Cui Dongshu, Deputy Secretary General of the National Passenger Car Federation, said in an interview with the Morning Post reporter yesterday that it is foreseeable that although the overall sales of Japanese cars in China will not fluctuate too much, in some regions and cities, due to national sentiment, their sales will be hindered.

        Cui Dongshu told reporters that most of the salespeople in Japanese car sales stores are young people in their 20s, with obvious emotions. Recently, the enthusiasm for car sales tours is not high.
On September 10th, Dong Yang, Secretary General of the China Association of Automobile Manufacturers, also mentioned that through data observation, the China Automobile Association found that the sales growth of Japanese cars in August was relatively slow, lower than other brands of cars, which is related to the Diaoyu Islands incident.

        Currently, there are six major Japanese car brands in China, including Nissan, Toyota, and Honda, as well as Suzuki, Mazda, and Mitsubishi. In August of this year, sales of mainstream Japanese car companies, except Honda, declined to varying degrees.

        Toshiga Junzhi, the chief operating officer of Nissan Motor Company, recently stated that the sales of new cars by Japanese manufacturers in China in August were damaged because "it is difficult to carry out large-scale promotional activities, especially the cancellation of outdoor promotional activities, which has affected sales promotion.". According to sales data, Mazda sold 165.39 million vehicles in China in August, a decrease of 6% compared to the same period last year (year-on-year). Toyota sold 75300 vehicles in the Chinese market that month, down 15.1% year-on-year.

        Overall, Japanese cars have shown a slight decline. According to the data released by the China Association of Automobile Manufacturers on September 10th, compared with the previous month (month on month), the sales of Japanese cars increased by 4.5% in August, while the sales of German, American, Korean, and French cars increased by 12.7%, 14.7%, 15.9%, and 11.7%, respectively; Compared with the same period last year (year-on-year), the sales of Japanese cars in August decreased by 2%, while the sales of German, American, Korean, and French cars increased by 25.3%, 21.2%, 12.8%, and 4.1%, respectively.

        According to a survey data provided to reporters by Geshi Automobile Network, the number of people who believe that the recent deterioration of Sino Japanese relations will have a significant negative impact on Japanese car sales accounts for 46% of the total votes; The proportion of people who believe that negative impacts are inevitable but not too large is about 48%.

        [Japanese electronic products] Overall sales of Japanese household appliances fell sharply

        With the continuous escalation of the Diaoyu Island incident, the overall sales of Japanese brands have plummeted since August. According to information from the IT channel of China News Network, recent internal data from a large e-commerce company indicates that sales of Japanese color TV brands in Beijing, Shanghai, and Guangzhou all fell significantly in August compared to last month, with Toshiba decreasing by 40.31%; Sanyo fell 44.32%; Panasonic decreased by 23.41%; Sharp fell 21.06%.

        The second Global Electronic Products and Parts Purchase Fair was held in Shenzhen a few days ago. The latest survey released by Global Resources, a world-renowned trade promotion agency, at the trade fair shows that the scale of China's consumer electronics market this year will reach 1368 billion yuan, making China the largest consumer electronics market in the world.

        As is well known, Japan's manufacturing industry is relatively developed, especially the electronics industry and automobile manufacturing industry. Famous manufacturers in Japan's electronics industry and high-tech include Sony, Panasonic, Sharp, Toshiba, Hitachi, and other companies. Among them, Sharp, as a leading foreign brand in the Chinese color TV market, achieved sales of 1 trillion yen (approximately 83 billion yuan) in China in 2011.

        [Rare Earth] Japan is afraid that China will restrict rare earth exports again

        For a long time, Japan has been China's most stable and largest rare earth export market. After the Diaoyu Island collision in September 2010, Chinese people have called on government departments to stop rare earth exports to Japan.

        However, this response has not been echoed by the Chinese authorities. On October 1, 2010, Japan announced that in order to break away from its heavy dependence on China for rare earth imports, it would implement a plan to develop rare earth replacement materials in advance, and prepare to develop rare earth in more countries to achieve multi-channel supply of rare earth.

        According to the Nihon Keizai Shimbun quoted on the website of the Ministry of Commerce, Japan has expanded the import of rare earth metals from regions outside China by various means. In the first half of this year, Japan imported 3007 tons of rare earth metals from China, accounting for 49.3%, which fell below 50% for the first time since 2000. In 2011,Japan's rare earth imports from China decreased by 34% compared to the previous year, to 15400 tons. Before 2009, more than 90% of Japan's rare earth resources needed to be imported from China.

        Hong Feng, former director of the National Rare Earth Working Group Office, said yesterday that Japan has never stopped searching for other sources of rare earth resources, and Japan's commitment to diversification of rare earth resources has not been a matter of recent years. "When our country does not protect rare earths so well, the Japanese pay attention to importing some light rare earths from the United States, Australia and other countries, because they do not want to fully follow our rules of the game, even if China says no one day, it will not export." The Nihon Keizai Shimbun said that Japan has currently ensured a total of about 16500 tons of rare earth metal mine resources in Australia, Kazakhstan, India, Vietnam and other countries, It is expected to start exporting to Japan in 2013.

        However, most of the rare earth resources obtained by Japan are "light rare earths" such as cerium and neodymium (which can ensure 60% to 80% of Japan's domestic demand), but Japan's dependence on China for "heavy rare earths" such as dysprosium used in permanent magnets for electric vehicles and energy-saving home appliance engines is still over 90%.

        And all along, medium and heavy rare earths are China's "specialty".

        [Investment] Japan's investment in China is only second to that of the UK

        According to data released by the Japan Trade Promotion Agency, in the first half of 2011, Japan's foreign direct investment was 33.47 billion US dollars, while Japan's investment in Asia was 13.57 billion US dollars, accounting for 40.5% of the total. Among them, investment in China was 5.24 billion US dollars, accounting for 15.6% of Japan's total foreign investment, only second to the United Kingdom.

        [Hint] Select industries where Japan relies heavily on China to counter

        According to the 2011 China Japan trade statistics report released by the Japan Trade Promotion Agency, Japan's trade deficit with China increased 5.9 times compared to 2010, reaching US $21.9 billion. In 2011, the total trade volume between China and Japan was 344.9 billion US dollars, an increase of 14.3% compared to the previous year, and the trade volume between the two countries hit a new record high.

        In 2011, Japan's exports to China totaled $161.4 billion, an increase of 8.3% compared to the previous year, while its imports totaled $183.4 billion, an increase of 20% compared to the previous year. In terms of imports, due to the development of localization strategies by Japanese companies in China, as well as the import of products such as smartphones, Japan's imports to China will further increase. Therefore, Japan's trade deficit with China will also expand next year.

        Xu Mingqi, an economist, said that many people believe that the deteriorating relationship between China and Japan can lead to trade sanctions against Japan, but the effect of sanctions against Japan may not be as good as expected, leading to a double loss. If trade sanctions are to be imposed, Japan should be selected to impose sanctions and restrictions on products from industries that rely heavily on China and have a large sales market in China. "This requires a very good plan. It is not necessary to blindly resort to measures, but to take into account the impact of the measures taken and the possible counterattack and response that Japan may take. It is necessary to have a good consideration."

        [Viewpoint] Jin Baisong: The winner of the Sino Japanese economic warfare is the United States

        Recently, a considerable number of people in China have actively participated in the fishing protection campaign under the influence of patriotism, and expanded the scope of activities to "boycott Japanese goods.". It is not difficult to predict that Japan will also have words and actions to resist "Chinese goods", leading to economic conflicts with China. The author believes that if there is a conflict between China and Japan, the real strategic winner will only be the United States.

        On the one hand, the result of the "boycott of Japanese goods" is that both China and Japan are damaged. In the past few times, there have been "boycotts" of Japanese products in China, mostly by not buying Japanese brand products.

        However, in fact, many Japanese brand products are manufactured in China, and boycotting them will harm the interests of Japanese companies in China. However, the Chinese employees they hire will also inevitably suffer, and Japanese companies will also suffer from public contributions such as paying taxes for Chinese society. In addition, "boycotting Japanese goods" also requires us to purchase alternative products such as domestic products and products from other countries, but Japanese components and materials are widely used in these products.

        Japanese companies have a high level of technology and manufacturing, and many components are their exclusive products. Last year, due to the shutdown of some Japanese companies during the earthquake, the global supply of components was also cut off. This shows that domestic products and products from other countries also contain Japanese genes, and we have no ability to resist them.

        In fact, China and Japan have close economic and trade relations and a high degree of interdependence, but Japan relies more on China. As the world's largest exporter, China's exports to Japan are declining, accounting for 7.6% of China's total exports from January to July 2012. China's export market structure is currently relatively balanced and diversified, while Japan's exports to China account for about 22% of its total exports. At the same time, Japan's share of exports to markets such as South Korea, Taiwan, and Hong Kong before exporting to China is also large, that is, roundabout exports are estimated to account for about 10% of Japan's total exports. Together, Japan's dependence on the Chinese market is as high as 30% or more. Therefore, the high dependence of Japanese exports on the Chinese market means that if Chinese consumers boycott Japanese goods, it will have a greater effect than if Japanese consumers boycott Chinese goods.

        Behind the backdrop of the conflict between China and Japan stood a cold-eyed American. For the United States, leading the world and safeguarding its "global interests" have always been its strategic goals. The United States will make good use of any opportunity to suppress its competitors. Due to the economic crisis, heavy debt burden, and the rise of emerging economies, the United States deeply feels that it has lost control of the world. A considerable number of US policymakers believe that any weakening of China's power is tantamount to increasing US power. The United States is hoping to revive its manufacturing industry and restore international competitiveness, and the conflict between the two major manufacturing countries is likely to become a huge opportunity for the United States economy. From the perspective of strength, the United States will become a strategic beneficiary of the development conflict between China and Japan. www.jiashengsz.com