HANS GREIMEL

Japan bashing rears its head in…China

Hans Greimel is Asia editor for Automotive News.Hans Greimel is Asia editor for Automotive News.
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TOKYO -- Video images of angry mobs tipping over Japanese cars and bludgeoning them with metal pipes. It sounds like a throwback to the Japan bashing days of the 1980s in the United States.

But this time, the Japan bashing is happening in China.

There are important differences between these protests and the UAW rallies of yesteryear. And they highlight a key handicap Japanese brands face in the world's biggest car market.

Chinese protesters aren't lashing out about losing jobs to Japanese imports. They are supporting their government in its territorial dispute with Japan over a spray of tiny uninhabited islets in the East China Sea. The outcroppings, called the Senkaku Islands in Japan and Diaoyu in Chinese, straddle potentially huge undersea natural gas fields. Both sides want them.

The Chinese uprisings began over the weekend, after Japanese activists landed on the islands to back their country's claim by raising the Rising Sun flag. Thousands of outraged Chinese took to the streets in big cities throughout China -- targeting Japanese cars and Japanese businesses.

In the southern city of Shenzhen alone, about 1,000 demonstrators rallied and flipped over several Japanese cars -- including a Honda CR-V police vehicle, various media reported.

It's a problem for the likes of Toyota, Honda and Nissan -- because in China, Japan's auto industry is a proxy for all of Japan. Hate Japan, you hate their cars.

In the United States, trade policy largely triggered the rage at Japan's auto industry. But in China, any diplomatic dispute with Tokyo has the potential to target Japan's sweet spot: cars.

And violent street protests in China rarely occur without Beijing's tacit consent.

In 2010, Japan learned the hard way about Beijing's propensity to hold its economic interests hostage. That was the last time tensions flared over the disputed islands.

Back then, Beijing responded by halting shipments to Japan of rare-earth metals -- a critical ingredient in the electric motors and electronics of today's automobiles, especially hybrids.

In that case, China eventually eased its restrictions, but Japanese carmakers quickly began looking into alternative sources of rare earths and new technologies that don't use them.

Expect more pressure on cars emblazoned with the logos of Japan Inc. China and Japan are prickly neighbors. From territorial disputes, military distrust and trade friction to deep-seated animosities left over from World War II, there is fertile ground for future Japan bashing.

You can reach Hans Greimel at hgreimel@crain.com. -- Follow Hans on Twitter

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