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ISLAND WARS

Japan’s carmakers don’t want to see how this spat ends

By Lily Kuo

We asked earlier what’s at stake in the row between Japan and China over a set of islands in the East China Sea. Anti-Japanese sentiment in the country may now be affecting business sentiment and about US$345 in trade. Top Japanese automakers Toyota, Nissan and Suzuki have all said they plan to cut production in China, some of them as early as this week.

For the past decade, most car makers have been ramping up production in China, now the world’s largest auto industry. That market has been important to Japan ever since China became Japan’s second largest export market by the mid- 1980s.  In 2010, it’s estimated the market in China will have grown tenfold between 2005 and 2030.

This week Goldman Sachs said slower demand from overseas, notably in China called for a revision of Japan’s gross domestic product for the year through March to 1.9% from 2.3%.

The Asian titans continue to wage political battle. But it might be the economic front that leads each to concede mutual defeat.