China’s court seized Mitsui company commercial ship over the so-called unpaid vessel lease fees before the outbreak of Japan-China war. Japanese government is considering countermeasures that might include appealing to the International Court of Justice (ICJ). Japanese enterprises are very worried about China’s unlawful and reckless act. It it certain that investments in China will shrink and we will see more Japanese companies pull off from China. This will be equal to an act of suicide for Xi Jinping’s administration.
On Apr 21 chief cabinet secretary Yoshihide Suga during regular press conference stated that Japan is considering countermeasures: “Japanese government expresses deepest regret. When signing the agreement on normalization of Japan-China diplomatic relations, China abandoned war damages compensation claims from Japan. This incident will undermine the very basis of the agreement.”
The seized ship “Baosteel Emotion” is transporting coal ore and belongs to Mitsui O.S.K. Lines. It is the first case in the post-war history when the property of a Japanese enterprise is being seized by the Chinese authorities.
Chinese court supported the plaintiffs, relatives of the managers of a Chinese transportation company, on the case that it lent a ship to a Japanese company “Daido Kaiun” in 1936, just before the start of Japan-China war, but the vessel lease fees were not paid. Daido Kaiun’s successor is Mitsui O.S.K. Lines.
Japanese government states that the right of claim from China has ceased to exist in 1972 when the joint Japan-China declaration was released. But Chinese court gave victory to the plaintiffs. Since Mitsui O.S.K. Lines did not pay the damages ordered, Shanghai court seized the company’s ship in Apr 19.
In China the lawsuits on the “forced labor” against Japanese companies are continuing. Japan reckons that if the things left as they are, it would result in more Japanese property being seized and considers the countermeasures including filing a suite in the International Court of Justice.
Speaking of lawsuits against Japanese companies under Xi Jinping regime a person involved with a Japanese company points out: “If there are more cases when Japanese enterprises would suffer losses, it would give them more reasons to move to the South-East Asia.”
Even now according to the Chinese Commerce Department released Apr 17, direct investments from Japan in Jan~Mar decreased 47.2% in comparison to the previous year to $129 million (¥1.233 billion).
Masahiro Miyazaki, an analytic well familiar with China’s situation says this: “In Hu Jintao times they never did such things. Now they go through all the way with their abuses. For China it is equal to a suicide”.
Miyazaki continues: “In China administration does not function, and there is no separation of the three branches of government. Everything is being decided by the higher-up in the communist party. It is not the country that is governed by the law. Japanese companies will continue decreasing their investments in China. When we look at other big companies – only General Motors (US) and Volkswagen (GER) are increasing their investments in China. The perception that expanding in China is a mistake will be spreading all over.”