Some Japanese Firms Suspend China Manufacturing After Weekend’s Violent Protests [UPDATE: Confirmed]

Japanese restaurants and cars in China are targeted for vandalism in these images posted to Sina Weibo over the weekend. (Click to enlarge)

MarketWatch is saying that three major Japanese companies – Canon (NYSE:CAJ), Panasonic (TYO:6752), and Lion Corp (TYO:4912) – are stopping their China-based manufacturing today, Monday. It comes after a weekend of violent protests in several cities in China about the disputed islands that are claimed by China, Taiwan, and Japan. Those protests saw numerous Japanese restaurants and stores attacked in displays of supposed patriotism. Even a number of Japanese-brand cars were overturned in the vicinity of the protests (pictured).

[UPDATE one hour after publishing: The BBC has confirmed with Panasonic that its “factory in Qingdao will remain shut until 18 September.” Canon is thought to have the same two-day shutdown while the whole situation is being reviewed].

It’s not clear if the suspended manufacturing is linked to worker safety at those plants, or if it’s some statement by those companies in response to the ugly protests. The heated dispute over the rocky outcrops – territory which might also yield significant oil reserves – has gotten worse in recent months. Each escalation in tension over the islands – known as Diaoyu Islands in Chinese; Senkaku Islands in Japan – has caused the unusual scene of street protests in China, with some protestors even calling for war on Japan, while others have sparked vandalism against some well-known Japanese brands.

As noted yesterday by Global Voices, these nationalistic protests have not been suppressed online, not even in social media like Sina Weibo, in contrast to the high speed and clinical deletion of public outcries on other thorny subjects. Images of the protests, and even of acts of violence and burning cars, floated freely all over Sina Weibo all weekend – and only today are they being cleared up. Searching for “Diaoyu Islands” on Sina Weibo causes the site to return an error, and we now see many posts deleted.

Japanese foreign direct investment (FDI) in China is thought to total billions of dollars per year, much of it in hi-tech manufacturing. JapanInc notes that: “According to Chinese estimates, Japanese FDI annual totals were $3.8 billion on average in 1996 to ‘98, $2.9 billion in 1999 to 2000, and $4.3 billion in 2001.”

[Source: Marketwatch]