Senkaku Islands: Mitsubishi cuts car exports, US encourages diplomacy

Added by on October 25, 2012

Japan’sMitsubishi Motors said on Thursday it plans to cut automobile exports to China by 50%, resulting in an export of about 1,750 cars to the country as opposed to 3,500.

Osamu Masuko, president of the automaker, made the comments in light of continued deterioration of relations between China and Japan as a result of a dispute over the Senkaku Islands in the East China Sea.

Japan’s Vice Foreign Minister Chikao Kawai asserted that the Senkaku Islands are Japanese territory, adding Tokyo has no plans to back down. Although, said Minister Chikao Kawai, Japan continues its diplomatic dialogue with China.

Assistant US Secretary of State Kurt Campbell, visiting Japan this week, following a series of recent visits by high-ranking US officials to East Asia, renewed the US call for a diplomatic solution over the disputed islands.

The dispute over the Senkaku Islands dates back to 1968 when there was a high probability that oil reserves may be located off the islands’ coast. Japan asserted sovereignty over them following the administrative transition from the United States to Japan under the Okinawa Reversion Treaty between the United States and Japan. China claims it discovered the islands in the 14th century and has had control of them since then.

China imported over 1m cars during 2012, as reported by the China Association of Automobile Manufacturers (CAAM). Most imported cars are from the United STates and Great Britain, accounting for about 60% of all imports; German BMW and Mercedes brands account for 25% of all imports; Lexus, Audi, and Volkswagen account for 15% of all imports to China. SUVs account for 58%, yet have a higher import tax because their engines are larger than 2.5 litres. Industry analysts say China’s imports may shift more towards European brands as a result of their smaller engines and lower import taxes.