China's ban on Japanese seafood has more political than economic heft
24/08/2023 12:44
By Katya Golubkova and Dominique Patton
TOKYO/BEIJING, Aug 24 (Reuters) - China may be Japan's
top seafood export market but marine products make up less than
1% of Tokyo's global trade, which is dominated by cars, so that
Beijing's seafood ban on its neighbour is more of a political
gesture, analysts say.
China has said Thursday's ban on seafood imports from Japan
was prompted by concerns about the "risk of radioactive
contamination" after it started releasing treated radioactive
water from the wrecked Fukushima nuclear plant into the sea.
"The Fukushima water release is mostly of political and
environmental significance," said Stefan Angrick, a senior
economist at Moody's Analytics.
"Economically, the ramifications of a potential ban on
Japanese food shipments are minimal."
Last year Japan exported seafood worth 87.1 billion yen
($600 million), or a fifth of its total, to top trading partner
China, while Hong Kong, Japan's No.2 seafood market after
mainland China, accounted for another 75.5 billion.
The Asian financial hub of Hong Kong and the gambling centre
of Macau, both Chinese-ruled, are banning imports from 10
Japanese regions.
With Japan's total exports, dominated by cars and machinery,
standing at close to 100 trillion yen, impact from China's move
is negligible, analysts say.
The neighbours have complex ties rooted in history and the
question of a regional balance of power.
Just last week Beijing criticised an agreement among the
United States, South Korea and Japan to strengthen military and
economic ties.
This week's ban "seems part of the features of China-Japan
rivalry, which is of course entangled with China-U.S.
competition, given Tokyo's close alliance relationship with
Washington," said Chong Ja Ian of the National University of
Singapore, who analyses how major power competition affects the
domestic economies of third countries.
Seafood exports to China and Hong Kong accounted for just
0.17% of Japan's total exports last year, said Takahide Kiuchi,
an economist with the Nomura Research Institute.
"Even if the import suspension continues for one year, the
effect of depressing Japan's gross domestic product is only
0.03%."
Since the vast majority of Japan's fish catch is consumed at
home, top seafood producers Maruha Nichiro 1333.T and Nissui
1332.T , expect limited impact from the ban, their
spokespersons told Reuters.
The news hardly affected their shares, with Maruha Nichiro
closing up 0.12% and Nissui adding 0.75%, moderately
underperforming a rise of 0.87% in the benchmark Nikkei index
.N225 .
NEITHER FOR CHINA
China's customs data shows it is sourcing all its bluefin
tuna, one of the most expensive fish globally, from Japan, while
scallops make up the largest import by volume.
Yet the 156,000 metric tons of seafood Japan supplied to
China last year contribute less than 4% of the latter's seafood
imports of $18.8 billion, the data shows, with Ecuador, India
and Russia being the largest suppliers.
"It's not going to make many ripples in the seafood sector,"
said Gorjan Nikolik, senior global seafood specialist at Dutch
bank Rabobank, referring to the ban. "Japan is not a relevant
exporter."
Fukushima plant operator Tokyo Electric Power Co (Tepco)
9501.T has vowed to compensate domestic businesses for damage
from a fall in exports because of the ban.
About 82% of Japanese companies expect China to stay at
least as important to their business in future as it is now, a
Reuters corporate survey showed this month.
Mainland China was Japan's biggest export market in 2022, at
$145 billion, data from the International Monetary Fund shows.
($1=145.3700 yen)
(Reporting by Katya Golubkova in TOKYO and Dominique Patton in
BEIJING; Additional reporting by David Dolan, Ritsuko Shimizu,
Maki Shiraki, Makiko Yamazaki, Mariko Katsumura, Kantaro Komiya,
John Geddie, Sakura Murakami, Hitoshi Ishida and Elaine Lies in
TOKYO, Martin Quin Pollard in BEIJING; Editing by Clarence
Fernandez)
((ekaterina.golubkova@thomsonreuters.com;))