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Japan-China islands row threatens trade


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Japan-China islands row threatens trade

A territorial row between China and Japan looks set to hurt trade between Asia’s two biggest economies.

Demonstrators demanded a boycott of Japanese goods outside the country’s embassy in Beijing on Monday.

There have also been attacks on Japanese firms, such as electronics giant Panasonic.

The company has temporarily shut its Qingdao factory after it was sabotaged by Chinese employees.

Trade between the two nations amounted to 260 billion euros last year.

A breakdown in commercial ties would harm both countries as they struggle with a global economic slowdown.

The US has refused to take sides in the dispute. Secretary of State Leon Panetta has called for both China and Japan to show “calm and restraint.”

The row centres on a group of uninhabited yet resource-rich islands in the East China sea, which are called Senkaku in Japan.

The Japanese government said it had “nationalised” three of the islets last week “to maintain peace and security” in the region.

Beijing argues Tokyo’s claim is merely a legacy of its invasion of China in the 19th century.

It refers to the group as the Diaoyu Islands, which are rich in fish stocks and close to oil and gas fields.

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