Japan Supply Disruptions Will Hit China
News Story
Chinese firms may delay imports of key components
Supply chain disruptions from Japan's earthquake could force Chinese firms to delay imports of key components, especially for digital products, and possibly postpone product launches, the official newspaper of China's commerce ministry said.
The International Business Daily quoted Zhao Jinping, a researcher with China's Development Research Center, as saying the problems could be short-lived because Chinese importers could source replacement parts from South Korea and Taiwan.
The newspaper added that Japan's huge demand for building materials for reconstruction would soon enough provide opportunities for Chinese exporters.
However, independent economists quoted by Reuters warned that the short-term impact could be quite severe in China because of its close trade links with Japan. The economists said this might delay monetary tightening by Beijing, which has been seeking to limit inflation.
"We should see a profound impact on China's exports to Japan in Q2 and a slowdown of exports to the global market due to disruption of integrated supply chains," Isaac Meng, economist with BNP Paribas in Beijing, told Reuters. "It is too early to assess the full impact, but we expect downward pressure on growth in the second quarter, especially exports and industrial production."
Japan is China's biggest source of imports, with a 13 percent share, and China's second-biggest export destination, taking 8 percent of its shipments, according to official data.
China's imports from Japan include crucial high-tech inputs for auto, machinery and electronics production that is exported to other nations.
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