Blog: China / Japan dispute shakes retail sector
Dean Best | 17 September 2012
The diplomatic dispute between China and Japan over a group of islands in the East China Sea made headlines worldwide over the weekend - and Japanese retailers are feeling the effects of Chinese anger.
Japan's move to buy some of the islands from a private owner has angered some Chinese, who have protested across the country in recent days.
In the retail sector, Seven & I Holdings has said it will close over 200 outlets tomorrow, according to reports. Reuters said Aeon Co. also shut six Jusco supermarkets in China.
Elsewhere, Toyota and Honda reportedly said stores in China were damaged, while electronics firm Canon said it would close three plants.
The dispute between two of the world's three largest economies will be very closely watched by investors. People's Daily, the official newspaper of China's Communist Party, implied China could look at economic sanctions. "Japan is putting its own future at risk. The Japanese economy has long been sluggish, and Japan has always hoped to hitch out of its lost two decades on China's economic bandwagon," it wrote on Saturday.
One Japanese food company that will be monitoring the situation is Itochu Corp. The Japanese conglomerate said last week it was in "advanced negotiations" to buy Dole Food Co.'s global packaged food assets, as well as its fresh produce business in Asia.
Expansion in China looks to be a critical factor in Itochu's interest in the US firm's operations, as we reported on Friday.
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