It is becoming increasingly evident that *Japan is attempting to use monetary policy to paper over the cracks of imploding foreign policy decisions*. The 'storm in a teacup' that has brought China and Japan into fierce rhetorical battles over the Senkaku (or Diaoyu) Islands is having far more deep-seated impacts on the people of the two nations - and implicitly their buying habits. Unfortunately for the embattled Japanese - they are the ones in need far more than vice versa. As Bloomberg reports, discrimination against Japanese is increasingly common in China, as the head of China's Honda plant notes, he’s "*never worked in a more hostile place*." The dispute over the islands is raising resentment with bars and restaurants showings signs at the door saying, 'Japanese are barred from entering.' "Wherever I go, like department stores or in taxis, people ask me whether I am Japanese," and the reaction can be frosty. Simply put, no matter how cheap the Japanese make their cars by explicitly devaluing their currency, the largest auto market in the world (that of the Chinese) will not be buying; summed up rather bleakly, *"I don’t really care about [car] brands,... but there are cars I won’t buy -- the Japanese ones. The reason is simple: Diaoyu."**A sign suggesting no entry for “Japanese” is seen on a notice board posted outside Feng Bo Zhuang diner in Wuhan*, Hubei province on April 22, 2013. Asked about the sign, “My boss thinks the Japanese are way wrong on the Diaoyu islands issues, so he decided to put up the sign,” said a manager dressed in a Kung Fu master’s outfit who identified himself only by his family name, Zhong. *“It’s also our way of marketing, because Chinese people were all angry.” *
Via Bloomberg,
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*Discrimination against Japanese is common in China*, according to Yasuhide Mizuno, the head of Honda’s venture in Wuhan, ... says he’s never worked in a more hostile place.
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“*Wherever I go, like department stores or in taxis, people ask me whether I am Japanese*,”... When he says yes, he said, the reception can be frosty.
Mizuno’s experiences in the city, site of one of the bloodiest battles of the Sino-Japanese war in the 1930s, illustrate why sales for Honda and Toyota Motor Corp (7203). have yet to recover since violent protests across China seven months ago.
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Japanese carmakers are *continuing to lose share* in the world’s biggest auto market.
The future of Japan’s car companies in China “is *tied to Sino-Japanese relations*, and there isn’t much one company can do through marketing,”
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*“I don’t really care about brands,”* Chen said as she checked out the gleaming models on display at the Shanghai Auto Show. *“But there are cars I won’t buy -- the Japanese ones. The reason is simple: Diaoyu.” *
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First-quarter China deliveries for Honda, Nissan Motor Co. and Toyota (7203) fell even as overall Chinese car sales rose 17 percent. The share of *Japanese brands dropped to 15 percent, versus a peak of 23 percent in 2011*, according to the China Association of Automobile Manufacturers.
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Japanese expatriates are *still turned away from grocery stores*, but not as often as before, he said. The Wuhan Tianwaitian *Golf Country Club is always booked when he tries to reserve a tee time*, he says, though it’s better than simply being told Japanese aren’t welcome on the course, as was the case a few months ago.
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“I hope relations will improve so we can have a better business environment.”
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But with *Japanese government officials again visiting the Yasukuni Shrine -- a ritual seen in Korea and China as tantamount to paying homage to war criminals -- the automakers and their employees continue to suffer collateral damage. *
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Mizuno said.* “This is a tough time for us to live in China.” *
Reported by Zero Hedge 3 days ago.