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Trilateral trade hurt by Japan's disasters

0 CommentsPrint E-mail CNTV, May 23, 2011
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China, Japan and South Korea have long-been important trade partners. However, the March 11th earthquake and tsunami, and the ensuing nuclear crisis have strained the trilateral economic and trade relations.

The gloom of March 11 is still hanging over Japan. The earthquake and tsunami damaged factories, causing severe shortages of parts and components, while a crippled nuclear power plant resulted in widespread power shortages. In the fall-out, Japan's factory production and consumer spending both fell the most on record in March. Companies are reporting lower earnings and diminished outlooks for the rest of the fiscal year.

The gloom has also reached its close trading partners in the region... China and South Korea. Manufacturers in electronic and auto industries have seen their supply chains disrupted. As many Japanese chip makers ceased production, prices of Japanese made electronics soared in China.

The damaged power plant in Fukushima Daiichi raised concerns of radiation. Japan's food and agricultural products export took a hit; while international travelers canceled visits to the country, dealing a blow to the traditionally booming travel industry.

But every dark cloud has a silver lining. Japan's reconstruction has begun and it's expected to last for several years. Analysts say that may bring business opportunities for material exporters in the region, especially China. And despite a return to recession in the first quarter, an aging population and a mountain of debt, Japanese officials are optimistic for the road ahead.

 

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