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How Will the Island Dispute Between China and Japan Affect Global Trade?

Published: on September 21, 2012

News video: How Will the Island Dispute Between China and Japan Affect Global Trade?China’s Ministry of Commerce said Wednesday that Japan's "purchase" of China's Diaoyu Islands was illegal and would sure impact and jeopardize the normal development of economic and trade relations between the two countries. Protests against Japan's "purchase" of the islands have spread across China over the past few days and many Japanese enterprises have suspended production. The incident has also encouraged Chinese people to stage protests and boycott Japanese goods. China’s manufacturing PMI inched up but still pointed to a contraction this month, reinforcing market expectations that the world’s second-largest economy is on track to slow further in the third quarter, while Japan's exports fell the most in six months in July. U.S. manufacturing closed out its weakest quarter in three years in September.

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