Japan quake sends shockwave through Chinese economy

Japan is not only an important trading partner but also the fourth largest source of direct investment for China in 2010, accounting for 4 percent of China's total FDI utilized, after Hong Kong, the Virgin Islands, and Singapore.

"Some Japanese manufacturing companies were damaged during the earthquake and stopped production, so it will take a while for them to resume operation. Therefore, the Chinese counterparts of the Japanese companies will be affected either by reduced sales in Japan's market or the hardship in stocking materials from Japan, etc.," said an anonymous official with China's Ministry of Commerce.

Ito Shiceo, director of the business division of Guangdong Nanhai Honda Automobile Parts Manufacturing Co., LTD, said that, due to the suspension of production of its parent company in Japan, the parts manufacturing company in China can only ensure normal production until the end of March.

Besides trade and foreign direct investments, the most directly affected industry in China was tourism.

Most travel agencies in China halted tours to Japan after China's National Tourism Administration on Saturday issued an emergency notice asking all travel agencies to ensure the safety of Chinese citizens on trip to Japan. The notice also required travel agencies to fully respect people's will to cancel their planned trips to Japan for safety concerns.

In east China's Jiangsu Province alone, all travel agencies have canceled their tourist groups to Japan within the month. Customers either received refunds or had their travel plans delayed.

In Shanghai, the municipal tourist administration also issued orders Monday afternoon for all tourist agencies to properly handle customers' requests to withdraw from trips.

Due to safety concerns, most travel agencies nationwide suggested customers avoid Japan as an upcoming travel destination or delay existing plans pending further observations.

Despite the potential damages brought by the quake, hopes of an economic rebound remain.

According to a statement from Bank of East Asia, the post-quake reconstruction of Japan would stimulate the economy in the long run, while damage to the economy would be only a short term issue.