China’s tensions with Japan. It affects you too.

Japan and China have been sparring over the Diaoyu Islands since late 2012. The story has dominated headlines in China in that time and also in Japan periodically. Just the other day I looked to see what the most read stories in the Peoples Daily were and six of the ten most read stories had to do with the dispute with Japan. And this was during a week when things had settled down somewhat and the story had all but disappeared from the headlines in Japan. I thought this was very interesting and betrayed not only how the two nations look at themselves in relation to each other but also how they look at the rest of the world.

China’s dispute with Japan has resulted in major losses for Japanese businesses in China. Not unexpectedly, many Japanese businesses – small and large – are reevaluating their China strategy in the wake of the dispute with China. And Chinese vendors are not favorably disposed to Japanese businesses, as I found out on one occasion lat year. I had emailed a vendor in Yiwu for a price quotation and the vendor, seeing my address in Tokyo and thinking I was Japanese, sent me an email telling me that his company had suspended all relations with Japanese customers. He subsequently apologized and amended his statement when I told him I was American. I was surprised though that a company would go to such extreme measures to make a political point. Can you imagine if the US and China had an international incident and a small US company facing a cancellation date on an order could not get its product out of China?

What this means for you. Although one would not think that a dispute between China and Japan would have any impact on a western business in China, it does. The reason is that China is very sensitive about foreign aggression on its own soil, past and present. This includes not only the current dispute with Japan, but Japan’s aggression during the Second World War, the Opium and Cold Wars with the west and the US bombing of the Chinese Embassy in Belgrade in 1999 , which is never far from the surface in China-US disputes. In other words, when China feels wronged by Japan then it also feels wronged by any other country that has acted aggressively towards China over the years. I would add that the US and other western nations have been strong allies of Japan in the post-war period and the Chinese are aware of this.

For this reason, when China is involved in a major international row – even if it involves a country other than your own – vendors may not react kindly if they have any sense that you are lording over them, when a mistake has been made or something is not going as planned. You should always exercise a little sensitivity at these times and conduct business in the most professional manner possible. Or as I like to say, work with your vendors and not against them.

I would add that you should never discuss politics with your China vendor. If you are travelling to China be careful about being drawn into discussions about politics. In fact, just as you check the weather before you travel overseas, it is also a good idea to check the headlines in the major Chinese English newspapers just to see what things are like before your trip. These days, for example, in addition to the headlines about the dispute with Japan there are quite a few articles and editorials about China-US tensions in the Chinese papers.

And a wise piece of advice: try to avoid mentioning the Japanese when you travel to China. If your vendor brings up the subject, then politely remain silent or try to change the subject. These discussions can be fraught with misunderstanding and can lead to awkward situations which just do not help your relationship-building in China. In sum, when you go to China to do business, focus on business. And leave the politics at home.


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