TORONTO – September sales figures for Japanese vehicles in China nosedived as anti-Japanese sentiment grows over a decades-old territorial dispute between the two nations.
Toyota Motor Corp. said Tuesday that sales of new vehicles in China dropped 48.9 per cent in September from a year earlier to 44,100 vehicles. Honda Motor Co. said September sales plunged 40.5 per cent to 33,931 vehicles. China sales for Nissan Motor Co. slid 35.3 per cent last month to 76,100 vehicles.
The tiny islands in the East China Sea, called Senkaku in Japan and Diaoyu in China, were nationalized last month by Japan. They were already controlled by Tokyo but also claimed by Beijing.
The move set off violent protests in China, and a widespread call to boycott Japanese goods.
Although the flare-ups have calmed in recent weeks, it may still require courage to be seen in a Japanese car in some Chinese cities. Crowds have demonstrated in the city of Shenzhen, smashed Japanese stores in Qingdao in Sandong Province, China and overturned a Japanese-made car in Suzhou in Jiangsu Province, China.
Global News has the backgrounder about this dispute.
Geography
The Senkaku/ Diaoyu Islands are uninhabited and consist of eight small islands (five islets and three tiny rock outcroppings) in the East China Sea. The area is bounded south by Taiwan and east by mainland China, and amounts to an area less than seven square kilometers. The islands are surrounded by an oceanic trench – meaning the deepest part of the ocean is about 1,000-2,000 metres in depth.
Brief history
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China and Japan’s conflicting claims over the sovereignty of the Senkaku Islands has been playing out for decades. Japan has claimed the islands since 1895 ( it considered them terra nullius or empty land), while China claims discovery of the islands under the Ming Dynasty (1368–1644).
China claims that they were ceded, along with Taiwan, in the Treaty of Shimonoseki (1895) – the treaty that ended the first Sino-Japanese War – and then returned to China at the end of World War II (1945).
The U.S. took jurisdiction of the islands after World War II from 1945 to 1972, and turned them over to Japan in 1972. China issued its first formal claim to the islands in December 1970, when Taiwan and Japan both issued claims. They wanted access to nearby petroleum resources.
In September 2010, the Japanese arrested a Chinese fishing boat captain who rammed his boat into two Japan Coast Guard ships off the coast of the Senkaku Islands. The Chinese government acted unilaterally with various economic sanctions, such as suspending rare earth exports to Japan. Many experts say this was the incident that led to a change in China’s foreign policy approach to the islands.
What’s at stake?
Experts say the islands are highly valued for economic and strategic reasons. There are beliefs that the East China Sea holds generous amounts of petroleum, including natural gas. It’s an area rich for fishing, and from a military point of view, the islands could serve as a tactical base.
Where the issue stands
Protests since Tokyo’s purchase in September were the largest anti-Japanese demonstrations since 2005. Japan considers it an attempt to thwart a potentially more inflammatory move by the governor of Tokyo, who had wanted not only to buy the islands but to develop them.
Production is back up this week for Japanese automakers, but reduced to lower levels as demand has collapsed.
Last week, Mitsubishi Motors Corp. reported that China sales dived 63 per cent to 2,340 vehicles in September. Mazda Motor Corp. said its sales in China sank 36 per cent to 13,258 vehicles for the month.
A study by J.P. Morgan, released Tuesday, projected Japanese auto exports to China to crash 70 per cent during the October-December period. It said that the export of auto parts will slip by 40 per cent – about the same drop estimated for exports of other consumer products such as electronics.
Combined, the aftermath of the territorial spat with China will shave 0.8 percentage point off Japan gross domestic product growth for the fourth quarter, sending Japan’s overall economy slightly downward, instead of the initial forecast for flat growth, according to J.P. Morgan.
With files from The Associated Press
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