Economic aftershocks of Japan quake roil Asia | The Daily Star
12:00 AM, March 21, 2011 / LAST MODIFIED: 12:00 AM, March 21, 2011

Economic aftershocks of Japan quake roil Asia

Economic aftershocks of the devastation in Japan are rolling through Asia. It is here, among Japan's neighbours, that the reverberations of the catastrophe are being felt hardest.
Automakers in Thailand are slowing production. South Korean electronics manufacturers face shortages of critical parts. Thousands of Japanese have cancelled trips to Taiwan. Panic buying has driven up prices of Japanese cameras in China, while Indian policymakers brace for higher oil prices.
The 9.0-magnitude quake and tsunami that laid waste to Japan's industrial northeast on March 11 and triggered an unfolding crisis at a crippled nuclear power plant has exacted a terrible human toll with estimates of more than 10,000 dead and hundreds of thousands homeless. It might also undermine Japan -- and China -- as manufacturing bastions as the catastrophe gives global companies further reason to spread suppliers over more countries to avoid reliance on a handful of production powerhouses.
"Even before the Japan disaster, there was a sense that many multinationals had become too dependent on a single source of production," said Frederic Neumann, HBSC's co-head of Asian economics research. "The broad trend to diversify production will not just affect Japan, it will affect China. China's production has become very concentrated."
South Korea, a manufacturing force in its own right, has been among the first to shudder as Japanese suppliers grappled with damaged factories and power shortages.
SUV and luxury sedan maker Ssangyong Motor is facing production constraints because of shortages of Japanese parts, said its chairman Pawan Goenka. "Most of the parts sourced from any given country are developed over time," he said. "It's not possible in most cases to switch sources. By the time you're able to switch sources the crisis will be over."
Samsung Electronics Co. and Hynix Semiconductor Inc. buy 50 to 60 percent of the wafers they use to make computer chips from Japan's Shin-Etsu Chemical Co., which shut two factories damaged in the quake. Operations at other plants have been affected by rolling blackouts, the Japanese company said on its website.
Samsung Heavy Industries Co. gets 30 to 40 percent of the large metal plates it uses for shipbuilding from Japan. "If the disaster in Japan lasts and affects our supplies, we would have to consider ordering more from our South Korean and Chinese suppliers," said public relations manager In-chun Hwang.
Profits at Taiwanese electronics firms will likely slump in the second quarter due to shortages of Japanese components, said Alex Huang, an analyst at Taipei's Mega Securities Corp.

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