8/19/2015

Explosions Blow Japan Business

Huge explosion in Tianjin caused broad collateral damages in the booming city in northeast China. Japanese businesses halted its activity and are closely watching what was going on in the devastated site. Another blast happened in Thailand shocked Japanese corporations with recognition that there was no haven from country risks in China. Expanding internal demand should be a goal for Japanese economy forever.

The place chemical material exploded was a part of Tianjin Port, where Chinese government had been developing for inviting foreign investment. Carmakers were one of the biggest sufferers from the explosion. Toyota factory, assembling its popular car, Corolla, was damaged in its windows and forced to stop operation, because it was included in evacuation area. It will reduce 5,500 of production with three days close. Mitsui Chemical, manufacturing seats for Toyota cars, also had to stop its operation, affected by interruption of Toyota factory. Fuji Heavy Industry, known as the bland of Subaru, and Mitsubishi Motors were also damaged on their finished cars.

Japanese major retailer, Aeon, closed its shop in Tianjin city, two kilometers away from the blasted site. Aeon Mall Tianjin TEDA was damaged in its exterior, windows and ceiling. One worker was injured. They still have no perspective to reopen it.

Terrorism in Bangkok was the second consecutive misfortune for Aeon. After explosive terrorism on Monday, Aeon supermarket in Bangkok was closed. Although the company supported daily life of 65,000 Japanese working in offices or factories, it had to close the shop for security reason.

While China has been the biggest trade partner for Japanese economy, Japanese companies suffered from unexpected risks inside the country. In 2005, anti-Japan demonstration in major cities protesting visit of Yasukuni Shrine by then Prime Minister Jun-ichiro Koizumi escalated to riots. In 2012, demonstration against Japan’s nationalization of Senkaku Islands turned to looting in Japanese shops. Thailand has been one of the countries for escaping from China risk.


But, the kingdom failed to be safer. Japanese companies had certainly been affected by internal risks in Thailand. It was, however, mainly domestic politics or natural disaster like a flood in 2011 that caused damages on Japanese business. This time, the blast in Bangkok is now suspected to be terrorism conspired by Islamic extremists. If the movement for secession in southern part of Thailand grows, environment of Japanese business, which has always been dependent on trade, will be damaged seriously.

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