Japanese firms rethink China plans

Japanese manufacturers are rethinking China investment and production plans as a rift over disputed waters in the East China Sea continues, Reuters reported. In a recent survey of 400 Japanese companies, 18% of the 267 that responded were considering shifting production to other countries, 24% said they may delay or lower planned investment in China, and 37% said they are more cautious about using China as a production hub. Low-margin sectors such as clothing and household electrical products are likely to be affected first, while industries that are dependent on China sales, such as vehicles and auto components, may slow production but will ultimately remain in China, analysts and executives said. Falling demand in China for Japanese products, particularly cars, is taking a toll on Chinese workers in Guangzhou where Sino-Japan auto joint ventures are major employers, the Wall Street Journal reported.