Anti-Japan riots in China likely to hurt sales

[HenryTo]

The road to prosperity in China will be a long and winding one. As I have said before, chances are that China will experience a significant slowdown for the rest of this year:
-------------------------------------------------------------
Wednesday June 8, 8:59 AM
A third of Japanese companies in China say anti-Japan riots likely to hurt sales, government study finds
A third of Japanese companies with operations in China expect business there to sag in the aftermath of anti-Japan riots two months ago, according to a government study.

The Japan External Trade Organization, a government-run agency that promotes trade, found that 151, or 36.5 percent, of the 414 Japanese companies surveyed in May forecast a fall in sales in China this year because of boycotts and a "tarnished image" for Japanese products.

Forty companies, or 9.7 percent, said their sales are already shrinking, the JETRO survey said.

Although more than half of the companies said the protests had no apparent effect on their sales, 13 percent said they would rethink plans to invest in China or even move their factories to other countries, according to the survey, which was posted on the agency's Web site.

The poll found that many companies that had shifted plants to China because of low labor costs were now worried about finding Chinese who want to work for Japanese companies, or possibly contentious management-worker relations.

Violent anti-Japan protests broke out in China in April as the two countries clashed over World War II history, exploitation of natural resources and the ownership of East China Sea islands. The riots led to a sharp decline in relations between Tokyo and Beijing.

In a JETRO survey in November and December of last year, more than 80 percent of Japanese businesses had expansion plans in China, while 0.2 percent said they would downsize or pull out from there.