Guess what? Japan decided to get in a pissing contest with China. They thought they had Condi and Bush's support and this support would cause the Chinese to blanch with fear and give them what they wanted: unilateral control of the China Seas. They thought they could push China around a bit and teach them who is boss.
Well, looks like Japan just shot their economy dead center. In just one day, the stock market there began a collapse as the import of what is happening in China sinks in. Previous to this fracas, Japan was floating down into another depression thanks to rising fuel costs eating into their profits. Now it is 100% certain that Japan will suffer an economic contraction as conditions vis a vis their biggest customer deteriorate.
It will take a great deal to placate China now.
BBC reports on worsening relations.
Japanese Foreign Minister Nobutaka Machimura went to Beijing on Sunday hoping to ease tensions. He wanted reassurance from the Chinese government that it would prevent further attacks on Japanese interests.
What he got, says BBC Beijing correspondent Louisa Lim, was a talking to.
Japanese Chief Cabinet Secretary Hiroyuki Hosoda said on Monday that it was "extremely regrettable" there was no apology.
Japanese officials are increasingly concerned about long-term damage to booming trade and investment between the two countries. Tokyo stocks have fallen, with the key Nikkei index down 3% - its biggest one-day loss in 11 months.
The NYT wonders about OUR stock market:
After last week's market plunge - when America's three main stock gauges fell more than 3 percent - Wall Street and unusually nervous individual investors are looking to the flood of earnings reports this week to see how optimistic corporate America is in its outlook for the economy.
Almost a third of the companies in the Standard & Poor's 500-stock index and almost half the 30 companies that make up the Dow Jones industrial average are to report earnings for the first three months of the year. But more importantly, many of them will comment on the financial quarters ahead and could either counter or reinforce the current pessimism about the economy.
The price of oil is floating downwards as expected since people are being forced out of the market thanks to high prices. All businesses are cutting back on fuel and energy use. In my interview with Tom, he said, "We are seeking ways to save on energy costs all the time now, it is significant", for example.
Traditionally, the stock market shoots up when oil goes down in price. Note that during the nineties, when our stock market shot up, oil shot down in price. In the eighties, it was identical. This is why everyone in our government as well as most market commentators never mention this. It seems to be highly verboten, ja?
But this also hides the effects of serious economic changes which are very dangerous. Note how swiftly the economic health of Japan is falling due to Chinese ire? The Chinese government hasn't done much to Japan but the Chinese PEOPLE are hitting Japan hard in the wallet. This is popular. Japan bashing is now a blood sport in China. We think, it can't happen to us.
It can and it will.
BEIJING, China (CNN) -- Japan is warning of economic consequences as China refuses to apologize for a spate of violent anti-Japan protests staged across the nation.
China is Japan's biggest trading partner, but Foreign Minister Nobutaka Machimura has warned that bilateral ties, "including on the economic front, could decline to a serious state."
The diplomatic row could threaten to derail trade between China and Japan that last year was worth about $167 billion. According to Chinese government statistics, Japan has invested in more than 20,000 projects in China with total actual investment of more than $32 billion
The tension between the two Asian giants is being reflected on stock markets on Monday, with Japan's Nikkei 225 average down more than 3 percent in the morning session.
From a back page story at the Washington Post....
"The Chinese government has never done anything for which it has to apologize to the Japanese people," Li said without smiling or shaking hands with Machimura in front of reporters. "The main problem now is that the Japanese government has done a series of things that have hurt the feelings of the Chinese people."
Li cited "the Taiwan issue," apparently referring to a recent policy declaration by Japan that left the impression it would join the United States in defending the self-governing island in case of an attack by China. He also mentioned Japan's "treatment of history." Japan on April 5 approved new school textbooks that critics say gloss over atrocities committed by its military in World War II.
The Asahi Shimbum in Japan editorializes:
A passive Beijing could lose the world's respect.
Shanghai has been struck by violent anti-Japanese demonstrations. On Saturday, protesters hurled rocks and other projectiles at Japan's Consulate General, breaking many windows. Japanese-owned convenience stores and restaurants were also damaged, with arson also reported. And two Japanese nationals were chased and injured by a mob.
With Tokyo having specifically requested Beijing to ensure the safety of Japanese citizens and Japanese interests in China, it is a mystery why such serious damage occurred again.
About 34,000 Japanese live in the economic boomtown of Shanghai, giving the metropolis the strongest Japanese presence in China. The spread of these violent demonstrations beyond the capital Beijing to Shanghai, where people from China and Japan daily interact through business, shocks and worries the Japanese community there.
Oh, the MYSTERY of Chinese anger! Can't figure it out at all! This deliberate cluelessness is going to cost Japan a very pretty penny. Basically what they are demanding is for China to brutalize their own, angry, citizens and force them to swallow Japanese insults.
Ain't gonna happen.
If Japan were truly trying to smooth over roiling waters, they would be saying soothing things, not making demands. But thanks to Condi's recent visit where she secretly told them the USA will back Japan in ANY dispute with China, with NUKES! Well, this was predictible. This is Japan's first foray into international relations conducted from a position of percieved strength: they get nasty.
All the money spent on trying to convince Asia that Japan is different from 1939 is down the drain. All of Asia is sitting up and looking hard at Japan now. The Japanese feel, "we are being attacked in China, this means we are VICTIMS" while failing to understand why they are being attacked.
They are the aggressors. This is all about not just WWII's many atrocities, Americans should be very angry with Japan about glossing over atrocities committed against Americans! This is all about economic dominion. Japan lorded it over Asia AFTER WWII by hitching their military/industrial wagon to America. Well, looks like the wheels of this jauggernaut are about to fall off.
World markets go down despite "cheaper" oil
U.S. stock futures pointed to a sharply lower open on Monday, in an extension of Friday's losses, which were sparked by disappointing results from International Business Machines Corp. (IBM.N: Quote, Profile, Research) .
Global stock markets tumbled to multi-month lows and corporate bonds sank on Monday as disappointing company earnings and nagging economic worries drove investors into safe-haven government bonds.
Well, hate to say this but investors better figure out that in a Tsunami, life rafts get swamped too. Running off to government bonds just when Bush famously said, "But these are mere pieces of paper" and thus, meaningless. Well, if you are worried about company "x" having problems, it doesn't seem smart to me to rush off to American bonds for safety. We are the Enron Nation.