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China protests: Japanese firms suspend some operations

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Media captionThe BBC's Martin Patience: ''The protests show that Beijing must do something to solve this dispute''

Some of Japan's biggest firms have suspended operations at some factories in China as safety concerns grow amid violent anti-Japan protests.

Panasonic said its factory in Qingdao would remain shut until 18 September, while Canon has also temporarily suspended operations at three plants.

Honda, Mazda and Nissan are stopping car production for two to four days.

The violence followed Japan's purchase of islands in the East China Sea which China claims sovereignty over.

Boycotts?

Camera maker Canon's affected factories are in the south-east of the country at Zhuhai and Zhongshan in the province of Guangdong and at Suzhou, near Shanghai.

A spokesperson for electronics giant Panasonic told the BBC that the firm would continue to monitor the situation over the next two days.

Honda's spokeswoman, Natsuno Asanuma, told Reuters the company was suspending production at two factories each in the southern city of Guangzhou and the central city of Wuhan. The company had seen some stores in Qingdao damaged by arsonists.

However, fellow carmaker Toyota, which was also targeted in the eastern city of Qingdao, said its factories and offices were operating as normal.

The overseas edition of the People's Daily, the main newspaper of the Chinese Communist Party, said that although Beijing was always "extremely cautious about playing the economic card", it could resort to economic retaliation if the dispute continues.

"In struggles concerning territorial sovereignty, if Japan continues its provocations, then China will take up the battle," it said.

Calls for boycotts of Japanese businesses and products have been spreading in the streets and on the internet.

Banners were put up at the Silk Market in Beijing reading: "The Silk Market boycotts Japanese goods."

Meanwhile, US Defence Secretary Leon Panetta called for "calm and restraint on all sides".

"It is in everybody's interest for Japan and China to maintain good relations and to find a way to avoid further escalation," he said, after meetings with the Japanese foreign and defence ministers.

Mr Panetta, currently on a week-long trip to Asia, arrived in China late on Monday and is due to meet the Chinese defence minister and vice-president.

Burning flags

The disputed islands, known as Diaoyu in China and Senkaku in Japan, are uninhabited but resource-rich.

They have been a contentious issue between the two countries and were the focus of a major diplomatic row between them in 2010.

The dispute flared up again over the weekend after Tokyo said it had agreed to purchase them, leading to thousands of protesters taking to the streets in various parts of China.

During the demonstrations, protesters burnt Japanese flags and targeted Japanese-made cars.

There have been reports of a Toyota dealership in China being damaged during the demonstrations.

The attacks on some Japanese businesses have raised fears about the impact of the protests on Japanese investment in China.

Analysts said that China, which was known for being a low-cost manufacturing base, has seen a steady rise in labour costs in recent times, negating a big advantage it had on other countries in the region.

They said that the protests could result in some Japanese firms starting to look beyond China for further expansion.

"They might want to consider expanding manufacturing operations in Thailand or in other nations that are more welcoming towards Japanese investment," said Shaun Rein of China Market Research Group.

He warned that such moves might have an impact on China's economic growth and also on the overall trade ties between Asia's two biggest economies.

"The trade relations are going to be damaged by the continuing protests, for sure."

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