Violence in China forces Japanese auto firms to cut production

All is not well in China these days.

The economy is slowing, and the country’s reputation for being the factory of the world has been taking hits in recent weeks. Apple’s favorite factory, where they serve tea and biscuits for 24×7 availability, has gone on strike, and now Japanese auto manufacturers are cutting production following recent violent anti-Japanese protests in China.

Shanghai, during better days, via Shutterstock

Sales have plunged at Japanese car makers since violent protests and calls for boycotts of Japanese products broke out across China in mid-September over the Japanese government’s purchase of a group of disputed islands in the East China Sea from their private owner.Nissan will suspend the night shift at its passenger car factories in China and operate only during the day, the business daily said. Nissan has two passenger car factories in China, in Huadu and Zhengzhou, with two lines each. A Nissan spokesman declined to confirm the report.

Toyota and Honda plan to cut China production to about half normal levels by shortening working hours and slowing down the speed of production lines, the Nikkei said without citing a source.

Neither means the end of China and its manufacturing dominance today, but both contribute to the growing image problem China has around the world.

Putting aside whether or not companies should move their factories overseas at all, what business is going to make long term plans to invest in China based on these recent events? Most countries fall victim to anti-foreign hysteria from time to time, but few countries become as uncontrollably violent as China. The government of China ought to be concerned, as these recent events will chip away at the pro-business image that they’ve spent decades building.

Bad news for China but an opportunity opens elsewhere.  How long until we see more business shift manufacturing to the US, such as China’s Lenovo?

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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