Japan quake sends shockwave through Chinese economy

BEIJING, March 15 (Xinhua) -- Japan's massive earthquake and tsunami have sent shockwaves through China's economy, though it is not yet possible to estimate the total loss, analysts said Tuesday.

Trade between the two countries will definitely be affected in the short term, said an official with China's Ministry of Commerce.

In 2010, Japan was one of China's most important trade partners, accounting for about 8 percent of China's total exports, while China sourced 13 percent of its imports from Japan. The majority of trade between China and Japan was in vegetable and animal products, minerals, machinery and base metals, according to a report from Morgan Stanley Asia Limited.

China ran the biggest trade surplus with Japan in textiles, and the biggest trade deficit in machinery and electrical equipment. Trade in machinery and electrical equipment was the main force behind growth in both exports to and imports from Japan, the report said.

Analysts believe that the quake's impact on bilateral trade will include petrochemical, electrical production, automobile, and agricultural industries.

"Take high-end petrochemical industries, for example. China mostly relies on importing petrochemical products from Japan, because, so far, China can not independently produce these kinds of products. But the quake damaged Japan's infrastructures, including electric supplies and transportation systems, therefore lowering its production capacity of petrochemical products," said Liu Zhibiao, dean of east China's Jiangsu Provincial Academy of Social Sciences.

"The price of petrochemical products will rise dramatically in a short period of time, and so we should be aware of that," Liu added.

The quake will also reduce Japan's domestic consumption ability, thus reducing Japan's imports from China, said Liu.

"Japan's imports of agriculture products and sea food products from China will fall," Liu said. "It will also affect China's processing industries. The seafood processing industries of east China's Shandong Province, for example."