China stepped out of line in its harassment of Japanese companies. Chinese laborers sued two Japanese companies over the “forced relocation” during WW2. They claimed compensation and the court in Beijing accepted the lawsuit. It is expected that similar claims will follow and this may cause the Japanese companies to pull back from Japan at a faster pace.
In 1972 China and Japan issued a joint statement that China will not claim any wartime damages from Japan. But with president Xi Jinping and the anti-Japan group coming into power this already settled case is brought back once again.
The court took in the lawsuit against two companies: Mitsubishi Materials (former Mitsubishi Mining & Cement Co.) and Nippon Coke & Engineering Co. (former Mitsui Mining Co.). Prosecutors claim that 35 Japanese companies engaged in the forced relocation and the number of victims is around 39000.
A Chinese attorney says: “Courts in China are under the Communist party command and there is a high probability that the decision will be against the Japanese companies”. All Japanese companies should carefully consider the legal risks in China, the country not being ruled by law.
It is very common for the Chinese government to vent the dissatisfaction in society
through the anti-Japan campaigns like boycotting Japanese goods or not allowing Japanese companies to take part in tenders. Recently the Chinese state TV announced that there are technical problems with digital single-lens reflex cameras made by Nikon, and on the Internet many called for boycott of the Japanese goods.
In this situation more and more Japanese companies starting from small and medium are giving up on opening business in China or expanding the presence there. The salary level or workers in the coastal areas of China is rising at a pace of 10~20% per year and it is no longer that attractive to produce things there. Due to the effects of Abenomics the value of yen has fallen and the urge to move production abroad is not that strong any more.
Japan’s direct investments in China during Jan~Feb has fallen 43.6% in comparison to the year before. It might as well be that Xi Jinping with his Japan bashing is digging a big hole for China.
Source
http://www.zakzak.co.jp/society/foreign/news/20140319/frn1403191209002-n1.htm
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