It looks like China’s crackdown on Japan-related books was only the beginning of its retaliation over the territorial islands dispute. Several Japanese business sources have revealed that the customs authorities in China are enforcing tighter restrictions and inspections of incoming Japanese products and outgoing Chinese products headed for Japan. It’s becoming abundantly clear that China is planning to wage war against Japan on the economic front, with a sudden reduction in the mining permits for rare earth minerals, to the government supported protests that did significant damage to Japanese manufacturing facilities located in China.
The Chinese cities of Shanghai and Tsingtao have been identified as introducing new inspection measures, while Tianjin has informed Japanese businesses that they will be increasing the rate of inspections and the number of products subject to inspection. The Japan External Trade Organization confirmed on Thursday that Shanghai is requiring all products of certain categories to go through customs. Much like the rest of the world, Japan relies on the cheap labor costs in China, putting many manufacturing and electronics businesses at their mercy. It doesn’t take too much imagination to understand that China will be prohibiting items left and right at their whim.
Shanghai’s customs have also increased the ratio of searches for Chinese raw materials that are being exported to Japan. Whereas they used to inspect roughly 10% of products, they now require all materials for optical products to be searched. Customs authorities in Tianjin have reportedly not yet told Japanese businesses what kinds of products are subject to the new requirements or what the ratio of products are required for inspection. Even if China doesn’t start refusing certain items for import of export, it’s clear that their new efforts will slow down and choke up the whole customs clearance process, and as China is Japan’s largest trading partner, this will result in significant changes to overall bilateral trade.