The Straits Times
Published on Sep 13, 2012

China says tensions with Japan likely to hurt trade


BEIJING (REUTERS) - China warned on Thursday that trade with Japan could be hurt by the sudden flare-up in tension over a small group of disputed islands that is threatening relations between Asia's two biggest economies.

"With Japan's so-called purchase of the islands, it will be hard to avoid negative consequences for Sino-Japanese economic and trade ties," Chinese Vice Minister of Commerce Jiang Zengwei told a news briefing.

Mr Jiang hinted that his government saw nothing wrong with peaceful boycotts of Japanese goods. China is a major market for Japanese cars and electronics, and China's National Business Daily newspaper said that travel agents have reported cancelled bookings for tours to Japan.

China is Japan's largest trading partner. In 2011, their bilateral trade grew 14.3 per cent in value to a record US$345 billion (S$424 billion).