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China's product supply chain affected by Japan quake

2011-3-30

Other Japan-related products also saw prices fluctuate. The Canon 5D mark II, a high-end camera, was priced at 16,700 yuan before the earthquake. The price tag jumped to 21,000 yuan after the quake and has now fallen back to around 18,000 yuan, according to Sun Xinlei, a salesman of Japan-brand cameras in Hailong Electronics Market at Zhongguancun.

"Sometimes when I quote prices, customers would not believe and they thought I was joking," he said.

In the electronics market, price rises are common. Plant shutdowns in Japan, which were triggered by a 9.0-magnitude earthquake, a tsunami and a nuclear crisis, have disrupted supply chains and pushed up prices in China, which is largely dependent upon Japan for key electronic components and automobile parts.

Japan's hard-hit northeast coastal regions serve as the manufacturing base of everything from chips, semiconductors and auto components.

According to information from the Japan External Trade Organization, Iwate prefecture, which was close to the quake's epicenter, is home to many popular semi-conductor manufacturers such as Toshiba, Fujitsu and Motorola.

"Japan is at the upstream of electronics manufacturing, especially when it comes to high-tech key components. China only serves as a processing and trading market, which is why when it is compared to other countries, China is more reliant on Japan," said Zhao Jinhua, deputy head of the Industry Research Department of the Development Center of the State Council.

He said that the knock-on effect, which might deal a blow to China's exports for the year, should not be underestimated.

The market is already beginning to feel the bite.

Mr He, a distributor of Japanese cameras at Hailong Electronics Market, told Xinhua that although they had sufficient stock right now, their inventories would run out in mid-April due to the shortage of raw materials and disrupted logistics.

To guard against the possible shortfalls, some retailers have hoarded products for better profits. Hu Dongping, a Canon agent at Hailong Electronics Market, said that they have access to fewer products in spite of the manufacturer's message that capacities are sufficient.

Source:Xinhua
 
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