As Violence Erupts, Panasonic, Canon Shut China Plants

Increasingly violent protests triggered by a China-Japan island territorial dispute have convinced Panasonic and Canon to suspend operations at Chinese plants. The decision follows attacks on Panasonic factories by masses of protesters, reports the BBC. Canon plants and a Toyota dealership have also been targeted, according to local media. The protests erupted following a decision by Japan to buy a chain of East China Sea islands from their private Japanese owner. But China claims sovereignty over the islands, which are also claimed by Taiwan. Huge crowds of protesters, many of whom clashed with Chinese police, have burned Japanese flags in the street and damaged Japanese-made cars.

Panasonic is now suspending operations at two plants, and Canon is suspending work at three of its factories in China. "We are definitely seeing that Japanese companies are being directly affected by the protests," a spokesman for a market research company tells the BBC. The deteriorating relationship is bound to impact other Japanese operations, as well as trade ties, he warns. "The trade relations are going to be damaged by the continuing protests." (More Panasonic stories.)