Flareups Between Japan, China, and South Korea Further Threaten Global Economy

Monday, September 24, 2012 07:40
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Flareups Between Japan, China, and South Korea Further Threaten Global Economy

Tags: China | trade | world economy

Japanese factories are burning, cars are being overturned, and Chinese boats are patrolling Japanese waters because of a territorial dispute that further threatens China’s economy.

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Japan is also feuding with South Korea over a territorial dispute as well as failure to make amends for its treatment of Korea during World War II.
 
South Korea is seeking compensation for the women who essentially were sex slaves for Japanese soldiers during the war. Japan asserts that South Korea’s dissatisfaction with previous efforts to make amends are offensive.
 
Japan is refusing to budge in its territorial disputes, particularly with China. The Japanese government recently bought some privately-owned islands controlled by Japan and also claimed by China.
 
The move set off violent anti-Japanese protests in over 100 Chinese cities, resulting in the burning of Japanese factories in those cities, looting of stores, and vandalizing consulates.
 
Japan has credited the Chinese government with trying to control the situation but also says the trade delays caused by the protests will curb economic activity, particularly from Japanese investment in China’s economy. Japan is China’s second largest trading partner. China is Japan’s largest.
 
China’s economy has been slowing, significantly affecting export business around the world and slowing global economic growth. Japan’s economy could suffer more if the issues are not resolved quickly. Insurance payments to Japanese businesses damaged by the protests could climb into the tens of billions of yen.

 

Global economies are already fragile and any further disruption in trade could affect the US economy, as well as Europe's.

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