China-Japan relations

Japanese exports to China drop 14.5pc in November

Chinese demand sags in November amid row over islands while shipments to the US rise

PUBLISHED : Thursday, 20 December, 2012, 12:00am
UPDATED : Monday, 30 May, 2016, 5:01pm

Japan's exports to the United States overtook shipments to China last month, official data showed yesterday, as a new government in Tokyo vows to stand its ground in a bitter diplomatic dispute with Beijing.

Exports to China dropped 14.5 per cent last month as demand for everything from cars to construction equipment contracted, while an improving US economy helped boost the flow of Japanese goods 5.3 per cent from a year earlier.

The result pushed exports to the US ahead of those to China for the first time in nearly a year, although Beijing remained Tokyo's biggest overall trade partner despite their simmering dispute over an East China Sea island chain.

Overall, Japanese exports fell 4.1 per cent while imports edged up 0.8 per cent, translating into an US$11.3 billion trade deficit for last month, the fifth straight monthly shortfall and a record for the month.

Exports to Europe - a key market for Japanese goods - were off 19.9 per cent as demand from the debt-strapped continent weakened.

The gloomy data for Japan's economy, which may have slipped into recession in the past quarter, comes days after the conservative Liberal Democratic Party swept to an electoral victory at the weekend.

Hawkish party leader Shinzo Abe has pledged to take a hardline stance in the dispute with China that flared badly in September after Tokyo nationalised the Senkakus, which Beijing refers to as the Diaoyu islands.

The dispute set off a bitter diplomatic row, huge anti-Japan protests across China and a consumer boycott that weighed heavily on sales of well-known Japanese brands, including those of top carmakers Toyota, Nissan and Honda.

However, sagging demand for goods such as construction equipment - less likely to be influenced by the consumer boycott - may also reflect uncertainty about the pace of growth in China's economy, the world's second-biggest after the US.

In a bid to reflate Japan's economy, Abe has pledged to boost infrastructure spending and pressure the Bank of Japan into more aggressive easing measures.