Japanese exhibitors fret over fallout from Diaoyu row

Japanese exhibitors at the China Import and Export Fair are worried about the possibility of sluggish business in China amid rising anger over Japan's illegal "purchase" of China's Diaoyu Islands.

For the first time Japan has organized a business delegation, including more than a dozen Japanese manufacturers, to visit China's largest trade event, the Canton Fair, which acts as a barometer of China's foreign trade.

Kenichi Hayashi, assistant manager of Sasaki Corp's overseas division, said the row between China and Japan over the Diaoyu Islands will affect its business in the Chinese market.

The Japanese company, which specializes in agricultural and environmental machinery, has opened a manufacturing base in Suzhou in East China's Jiangsu province, Hayashi said.

"We are here to meet more potential Chinese buyers for our advanced agricultural machines. But the number of visitors today is not as big as we had expected," he said.

Hayashi said the company's business in China has not been affected by the row over the Diaoyu Islands, but there could be a slowdown if the dispute continues.

"We are really afraid that China will cut some preferential policies for us Japanese manufacturers," he said.

Hayashi said the company's sales in China were valued at more than $5 million last year.

"China is speeding up its urbanization process, which has forced many rural people to move to cities. Our products, with high automotive ability, will meet the need in the country's rural areas," he said.

Most of the company's products, including harvesting machines and cultivators, benefit from China's farm machinery subsidy policy.

In February, the Chinese government said it will continue to subsidize farmers' machinery purchases this year to free up more rural labor and boost grain production.

A statement by the Ministry of Agriculture and the Ministry of Finance said the government has set aside at least 13 billion yuan ($2.1 billion) in subsidies for agricultural machinery purchases this year.

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