68% of Japanese companies worried about China-US trade war

Majority of Japanese companies believe China-US trade war may have a negative impact on their business

  342
Xi Jinping meets Shinzo Abe at APEC summit Dec. 2014

Xi Jinping meets Shinzo Abe at APEC summit Dec. 2014 (By Associated Press)

TAIPEI (Taiwan News) – According to a survey by Nikkei of Japan published on August 9, 68 percent of Japanese companies believe that the ongoing China-U.S. trade war may have a negative impact.

Although only one percent of Japanese companies are affected by the trade war at present, the uncertainty around China-U.S. relations is causing concern amongst Japanese business leaders.

The survey asked 72 Japanese companies who have close dealings with China and the United States for their views, receiving 56 responses.

The survey suggests that the general performance of Japanese companies is good, but managers are cognizant of the ongoing tension between the world's two largest economies, and the implications for their businesses.

The survey revealed a range of worries for Japanese businesses. First, Japanese businesses are concerned about future sales from China, as economic activity and investment by Chinese firms may soon decline.

Japanese businesses are also worried about how tariffs on Chinese-made intermediate goods and components used in Japanese-assembled products will affect sales and profitability of U.S. operations. This has additional problems too, as Japanese firms may be motivated to review their supply chains, sourcing goods from outside of China.

Lastly, some Japanese companies are anxious about the broader effects of the trade war, which may lead to a global economic slowdown.

The report quoted a senior researcher at Nomura Securities in Japan, who said that at present, only one percent of Japanese companies are affected by the trade war. If the trade war continues and additional tariffs are raised, the situation will be completely changed.

Nomura Securities believes the prospects for Japanese companies is good, but the overhanging cloud of the trade war makes investors less optimistic, reported Nikkei.